Table of Contents
o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Jurisdiction of Incorporation or Organization)
Sydney, New South Wales 1155
Commonwealth of Australia
(Address of principal executive offices)
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the United States Securities and Exchange Commission (‘SEC’)
ABN 48 123 123 124
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Life Company Valuations | 42 | |||||||
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Other Group Items | 44 | |||||||
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238 | ||||||||
239 | ||||||||
EX-1: AMENDED CONSTITUTION | ||||||||
EX-4.7: EMPLOYMENT AGREEMENT | ||||||||
EX-4.8: TERMS OF APPOINTMENT | ||||||||
EX-4.9: TERMS OF APPOINTMENT | ||||||||
EX-4.10: TERMS OF APPOINTMENT | ||||||||
EX-4.11: TERMS OF APPOINTMENT | ||||||||
EX-4.12: TERMS OF APPOINTMENT | ||||||||
EX-4.13: TERMS OF APPOINTMENT | ||||||||
EX-4.14: TERMS OF APPOINTMENT | ||||||||
EX-4.15: TERMS OF APPOINTMENT | ||||||||
EX-4.16: TERMS OF APPOINTMENT | ||||||||
EX-8: LIST OF CONTROLLED ENTITIES | ||||||||
EX-12: CERTIFICATION | ||||||||
EX-13: CERTIFICATIONS | ||||||||
EX-14: CONSENT OF ERNST & YOUNG |
International Representation | 240 |
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Page | ||||||
Financial Information Definitions | 5 | |||||
Currency of Presentation Exchange Rates and Certain Definitions | 13, 232 | |||||
Part I | ||||||
Item 1 | Identity of Directors, Senior Management and Advisers (1) | |||||
Item 2 | Offer Statistics and Expected Timetable (1) | |||||
Item 3 | Key Information | 13-17, 44-47, 94-95, | ||||
Item 4 | Information on the Company | 17-37, 58-62, 175-178, 185, 199-201, 240 | ||||
Item 5 | Operating and Financial Review and Prospects | 6-10, 16-52 | ||||
Item 6 | Directors, Senior Management and Employees | 10, 14, 39, 55-56, 60, 65- 69, 70-92, 163-168, 230-239 | ||||
Item 7 | Major Shareholders and Related Party Transactions | 76-92, 231-232 | ||||
Item 8 | Financial Information | 74, 96-224 | ||||
Item 9 | The Offer And Listing | 229 | ||||
Item 10 | Additional Information | 5, 235-237 | ||||
Item 11 | Quantitative and Qualitative Disclosures about Market Risk | 188-198 | ||||
Item 12 | Description of Securities Other Than Equity Securities (1) | |||||
Part II | ||||||
Item 13 | Defaults, Dividends and Delinquencies (2) | |||||
Item 14 | Material Modification to the Rights of Security Holders and use of Proceeds (3) | |||||
Item 15 | Controls and Procedures | 69 | ||||
Item 16A | Audit Committee Financial Expert | 67 | ||||
Item 16B | Code of Ethics | 67 | ||||
Item 16C | Principal Accountant Fees and Services | 57, 93, 185 | ||||
Item 16D | Exemptions from the Listing Standards for Audit Committee (1) | |||||
Item 16E | Purchases of Equity Securities by the Issuer and Affiliated Purchasers (1) | |||||
Part III | ||||||
Item 17 | Financial Statements (4) | |||||
Item 18 | Financial Statements | 97-100, 208-224 | ||||
Item 19 | Exhibits | 239 | ||||
Signatures | 238 | |||||
Consolidated Statements of Income for years ended 30 June 2005, 2004 and 2003 | 97 | |||||
Consolidated Balance Sheets as at 30 June 2004 and 2003 | 98 | |||||
Consolidated Statements of Changes in Shareholders’ Equity for years ended 30 June 2005, 2004 and 2003 | 99 | |||||
Consolidated Statements of Cash Flows for years ended 30 June 2005, 2004 and 2003 | 100 | |||||
Notes to the Accounts | 101-224 | |||||
Report of Independent Auditors | 225 |
(1) | Not required in this annual report. | |
(2) | Item 13 (A) and (B) None. | |
(3) | Item 14 (A) and (B) none, (C) not applicable and (D) no changes. | |
(4) | Not applicable as Item 18 complied with. |
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- | Growth in lending assets of 15%, with market share growth across a range of products, while net interest margins declined slightly (8 basis points) over the year; | |
- | Growth in Funds under Administration of 12%, partially offset by a decline in the gross margin by two basis points; | |
- | Insurance revenues benefited from a 8% growth in inforce premiums, despite severe weather storms in February; | |
- | Expenses remained virtually flat for three halves, despite being impacted by higher spend on compliance projects and a stronger NZ dollar; and | |
- | The charge for bad and doubtful debts as a proportion of Risk Weighted Assets remained consistent with the previous year at 17 basis points. |
Credit Rating | Long-term | Short-term | ||||||
Fitch Ratings | AA | F1+ | ||||||
Moody’s Investor Services | Aa3 | P-1 | ||||||
Standard & Poor’s | AA- | A-1+ |
- | Issue of NZ$350 million (A$323 million) of Perpetual Preference Shares in December 2004; | |
- | Issue of $200 million of shares in March 2005 to satisfy the Dividend Reinvestment Plan (“DRP”) in respect of the interim dividend for the year ended 30 June 2005; and | |
- | In accordance with APRA guidelines, the estimated issue of $272 million of shares to satisfy the DRP in respect of the final dividend for the year ended 30 June 2005. |
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§ | Continued strong home lending growth domestically and in New Zealand were the major contributors to the growth in lending asset balances for the year ended 30 June 2004, which increased 18% to $206 billion over the year ended 30 June 2003; | |
§ | Improved performance in Funds Management following positive investor sentiment in the market and higher assets under administration; | |
§ | Significantly stronger general and life Insurance results for the year ended 30 June 2004; | |
§ | A favourable credit environment, with very low levels of corporate and personal defaults for the year ended 30 June 2004; | |
§ | Initial benefits arising from the Which new Bank program, offset by | |
§ | Some margin compression, in line with the industry, with net interest margin down 14 basis points to 2.53% for the year ended 30 June 2004. |
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Full Year Ended | ||||||||||||
30/06/05 | 30/06/04 | 30/06/03 | ||||||||||
$M | $M | $M | ||||||||||
Contributions to Profit (after income tax) | ||||||||||||
Banking | 2,880 | 2,176 | 2,234 | |||||||||
Funds Management | 349 | 268 | 216 | |||||||||
Insurance | 309 | 251 | 129 | |||||||||
Net Profit after Income Tax (“cash basis”) | 3,538 | 2,695 | 2,579 | |||||||||
Appraisal value uplift/(reduction) | 778 | 201 | (245 | ) | ||||||||
Goodwill amortisation | (325 | ) | (324 | ) | (322 | ) | ||||||
Net Profit after Income Tax (“statutory basis”) | 3,991 | 2,572 | 2,012 | |||||||||
Full Year Ended | ||||||||||||
30/06/05 | 30/06/04 | 30/06/03 | ||||||||||
Shareholder Summary | ||||||||||||
Dividends per share — fully franked (cents) | 197 | 183 | 154 | |||||||||
Dividend cover — statutory (times)(1) | 1.5 | 1.1 | 0.9 | |||||||||
Dividend cover — cash (times)(2) | 1.4 | 1.1 | 1.3 | |||||||||
Earnings per share (cents) | ||||||||||||
Statutory — basic | 303.1 | 196.9 | 157.4 | |||||||||
Statutory — fully diluted | 303.0 | 196.8 | 157.3 | |||||||||
Cash basis — basic(3) | 267.6 | 206.6 | 202.6 | |||||||||
Cash basis — fully diluted(3) | 267.5 | 206.5 | 202.5 | |||||||||
Dividend payout ratio (%) | ||||||||||||
Statutory | 65.2 | 93.5 | 97.7 | |||||||||
Cash basis(4) | 73.9 | 73.9 | (5) | 75.9 | ||||||||
Weighted average number of shares — basic (number) | 1,273 | 1,256 | 1,253 | |||||||||
Weighted average number of shares — fully diluted (number) | 1,274 | 1,257 | 1,254 |
(1) | Net profit attributable to members of the bank after preference share dividends divided by dividends on ordinary shares for the financial year. | |
(2) | Net profit attributable to members of the bank (“cash basis”) after preference share dividends divided by dividends on ordinary shares for the financial year. | |
(3) | Calculated by excluding appraisal value uplift and goodwill amortisation from earnings used to calculate Earnings per share — statutory and dividing the result by the weighted average number of shares. | |
(4) | Dividends paid on ordinary shares divided by earnings excluding appraisal value uplift and goodwill amortisation, net of dividends on preference shares. | |
(5) | Dividend payout ratio for June 2004 excludes the impact of Which new Bank expenses ($535 million after tax), as communicated at the commencement of the program. |
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Full Year Ended | ||||||||||||
30/06/05 | 30/06/04 | 30/06/03 | ||||||||||
$M | $M | $M | ||||||||||
Net Profit after Income Tax (“statutory basis”) | 3,991 | 2,572 | 2,012 | |||||||||
Net Profit after Income Tax (“cash basis”) | 3,538 | 2,695 | 2,579 | |||||||||
Net interest income | 5,966 | 5,410 | 5,026 | |||||||||
Other banking income | 2,915 | 2,846 | 2,627 | |||||||||
Funds management income | 1,261 | 1,158 | 1,115 | |||||||||
Insurance income | 747 | 678 | 598 | |||||||||
Total Operating Income | 10,889 | 10,092 | 9,366 | |||||||||
Shareholder investment returns | 237 | 196 | 91 | |||||||||
Policyholder tax benefit/(expense) | 228 | 203 | (58 | ) | ||||||||
Total Income | 11,354 | 10,491 | 9,399 | |||||||||
Initiatives including Which new Bank(1) | 150 | 749 | 239 | |||||||||
Other operating expenses | 5,697 | 5,500 | 5,312 | |||||||||
Total Operating Expenses | 5,847 | 6,249 | 5,551 | |||||||||
Charge for bad and doubtful debts | 322 | 276 | 305 | |||||||||
Net Profit Before Income Tax | 5,185 | 3,966 | 3,543 | |||||||||
Policyholder tax expense/(benefits) | 228 | 203 | (58 | ) | ||||||||
Corporate tax expense | 1,409 | 1,059 | 1,016 | |||||||||
Outside equity interests | 10 | 9 | 6 | |||||||||
Net Profit after Income Tax (“cash basis”) | 3,538 | 2,695 | 2,579 | |||||||||
Appraisal value uplift/(reduction) | 778 | 201 | (245 | ) | ||||||||
Goodwill amortisation | (325 | ) | (324 | ) | (322 | ) | ||||||
Net Profit after Income Tax (“statutory basis”) | 3,991 | 2,572 | 2,012 | |||||||||
(1) | Results for the Financial Years 2005 and 2004 reflect the Which new Bank program, while results for the Financial Year 2003 includes strategic initiatives undertaken. |
Full Year Ended | ||||||||||||
30/06/05 | 30/06/04 | 30/06/03 | ||||||||||
Key Performance Indicators | $M | $M | $M | |||||||||
Banking | ||||||||||||
Net interest margin (%) | 2.45 | 2.53 | 2.67 | |||||||||
Average interest earning assets | 243,948 | 214,187 | 188,270 | |||||||||
Average interest bearing liabilities | 225,592 | 197,532 | 174,737 | |||||||||
Funds Management | ||||||||||||
Funds under administration | 123,064 | 109,883 | 98,566 | |||||||||
Insurance | ||||||||||||
Inforce premiums | 1,265 | 1,167 | 1,076 | |||||||||
Capital Adequacy | ||||||||||||
Tier 1 (%) | 7.46 | 7.43 | 6.96 | |||||||||
Total (%) | 9.75 | 10.25 | 9.73 | |||||||||
Adjusted common equity(1) | 4.91 | 4.75 | — |
(1) | Adjusted Common Equity (“ACE”) is one measure considered by Standard & Poor’s in evaluating the Group’s credit rating. The ACE ratio has been calculated in accordance with the Standard & Poor’s methodology. As the Bank did not disclose this ratio for the Financial Year 2003, no comparative is published for that year. |
Credit Ratings | Long Term | Short Term | Affirmed | |||||||||
Fitch Ratings | AA | F1+ | Jun 05 | |||||||||
Moody’s Investor Services | Aa3 | P-1 | Jun 05 | |||||||||
Standards & Poor’s | AA- | A-1+ | Jun 05 |
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30/06/05 | 30/06/04 | 30/06/03 | |||||||||||
Balance Sheet Summary | $M | $M | $M | ||||||||||
Total assets | 329,035 | 305,995 | 265,110 | ||||||||||
Total liabilities | 302,975 | 281,110 | 242,958 | ||||||||||
Shareholders’ equity | 26,060 | 24,885 | 22,152 | ||||||||||
Assets held and Funds under administration | |||||||||||||
On Balance Sheet | |||||||||||||
Banking assets | 292,026 | 269,066 | (1) | 229,289 | (2) | ||||||||
Insurance Funds under administration | 22,959 | 22,952 | 22,144 | ||||||||||
Other insurance and internal funds management assets | 14,050 | 13,977 | (1) | 13,677 | (2) | ||||||||
329,035 | 305,995 | 265,110 | |||||||||||
Off Balance Sheet | |||||||||||||
Funds under administration | 100,105 | 86,931 | 76,422 | ||||||||||
429,140 | 392,926 | 341,532 | |||||||||||
(1) | Comparatives for 30 June 2004 have been restated to reflect a restructure and subsequent realignment in business segments. | |
(2) | The comparatives for the Financial Year 2003 have not been restated. |
Full Year Ended | ||||||||||||
30/06/05 | 30/06/04 | 30/06/03 | ||||||||||
Productivity and Efficiency(1) | $M | |||||||||||
Banking | ||||||||||||
Expense to income (%) | 50.2 | 59.2 | 54.7 | |||||||||
Funds Management | ||||||||||||
Expense to average funds under administration (%)(2) | 0.73 | 0.80 | 0.87 | |||||||||
Insurance | ||||||||||||
Expense to average inforce premiums (%)(2) | 45.5 | 47.3 | 50.4 | |||||||||
Total operating income per FTE ($) | 308,357 | 278,047 | 261,292 | |||||||||
Full time staff equivalent (FTE’s) — Australia | 27,201 | 28,814 | 29,608 | |||||||||
Full time staff equivalent (FTE’s) — International | 7,322 | 7,060 | 6,237 | |||||||||
Full time staff equivalent (FTE’s) — total excluding Which new Bank | 34,523 | 35,874 | 35,845 | |||||||||
Full time staff equivalent (FTE’s) — Which new Bank(3) | 790 | 422 | — | |||||||||
Full time staff equivalent (FTE’s) | 35,313 | 36,296 | 35,845 |
(1) | Productivity changes shown as an annualised percentage change. | |
(2) | Ratios for Financial Year 2003 have not been restated for the segment definition changes in Financial Year 2004. The effect of restatement is not material. | |
(3) | Full time staff equivalents working on the Which new Bank program |
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- | An increase in cash EPS exceeding 10% compound average growth rate (CAGR) over the three years, which has subsequently been revised upwards to exceed 12% CAGR; | |
- | Achieving a 4-6% annual productivity improvement; | |
- | Regaining profitable market share in key business lines; and | |
- | Increasing dividends each year. |
- | “CommLeader”, the Bank’s leadership program which provides a common understanding of our approach to leadership and desired behaviours that underpin the cultural change, has been completed by 300 senior leaders; | |
- | Service and sales training for 27,000 staff members has been completed, thereby equipping staff and managers to provide higher quality needs analysis and improved service to our customers; | |
- | “CommWay”, initiatives have achieved turnaround time improvement across many of the Bank’s processes. In addition, a significant improvement in response times for home loans and personal loans has been achieved with end-to-end systems and process redesign. | |
- | “CommSee”, the new customer management platform, provides our customer service staff with ready access to imaged client documents and authorities, is making it easier to view customer information. More than half of the Bank’s branches now have CommSee operating and we are averaging over 90,000 referrals per month and maintaining a conversion rate of around 30%. Although CommSee is still being implemented across the country, the Bank believes that the momentum gained during the second half of the year will position the Bank well to benefit fully from this customer service initiative; | |
- | A further 127 branches have been refurbished this year, bringing the number of branches modernised to help our people provide faster, more efficient service, to 252; | |
- | The new NetBank platform was introduced in April 2005 providing enhanced functionality and greater flexibility for our 2 million on line customers; | |
- | A redesign of Support Functions has led to the implementation of new business models, achieving simplification and efficiency gains and improving customer service as reflected in the internal customer service survey results; and | |
- | The Wealth Management team achieved its June 2005 goal of reducing the number of product systems to seven. This brings the number of systems decommissioned to 10, since the beginning of Which new Bank. |
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Full Year Ended | ||||||||
30/06/05 | 30/06/04 | |||||||
Which New Bank (WnB) | $M | $M | ||||||
Gross spend | 601 | 634 | ||||||
Change in provision for future costs | (97 | ) | 208 | |||||
Investments capitalised | (154 | ) | (112 | ) | ||||
Net Which new Bank expenses | 350 | 730 | ||||||
Less: Assumed normal project spend | (200 | ) | (200 | ) | ||||
Expensing of previously capitalised software | — | 219 | ||||||
Incremental WnB expenses — before tax | 150 | 749 | ||||||
Incremental WnB expenses — after tax | 105 | 535 | ||||||
Which new Bank expenses to date | 1,235 | 634 | ||||||
Full Year Ended | ||||||||
30/06/05 | 30/06/04 | |||||||
Incremental WnB expense by Segment | $M | $M | ||||||
Banking | 112 | 698 | ||||||
Funds Management | 36 | 37 | ||||||
Insurance | 2 | 14 | ||||||
Incremental WnB expenses — before tax | 150 | 749 | ||||||
Full Year Ended | ||||||||
30/06/05 | 30/06/04 | |||||||
Which new Bank benefits — total | $M | $M | ||||||
Gross benefits — estimated revenue | 340 | 152 | ||||||
Less: Additional operating expenses | (67 | ) | (60 | ) | ||||
Net benefits — Revenue | 273 | 92 | ||||||
Gross benefits — Expenses | 451 | 145 | ||||||
Net benefits pre tax | 724 | 237 | ||||||
Target communicated to market | 620 | 200 | ||||||
Full Year Ended | ||||||||
30/06/05 | 30/06/04 | |||||||
Investment capitalised under WnB | $M | $M | ||||||
Branch Refurbishment | 58 | 74 | ||||||
IT systems | 96 | 38 | ||||||
Total amount capitalised | 154 | 112 | ||||||
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Year ended 30 June | ||||||||||||||||||||||||
2005 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||
(A$ millions, except where indicated) | ||||||||||||||||||||||||
Selected Consolidated Income Statement Data | US$M | (3) | ||||||||||||||||||||||
Australian GAAP | ||||||||||||||||||||||||
Interest income | 12,337 | 16,194 | 13,287 | 11,528 | 10,455 | 11,900 | ||||||||||||||||||
Interest expense | (7,792 | ) | (10,228 | ) | (7,877 | ) | (6,502 | ) | (5,745 | ) | (7,426 | ) | ||||||||||||
Net Interest income | 4,545 | 5,966 | 5,410 | 5,026 | 4,710 | 4,474 | ||||||||||||||||||
Charge for bad and doubtful debts | (245 | ) | (322 | ) | (276 | ) | (305 | ) | (449 | ) | (385 | ) | ||||||||||||
Non interest income | 4,697 | 6,166 | 5,282 | 4,373 | 4,835 | 4,824 | ||||||||||||||||||
Operating expenses (incl. Goodwill) | (4,702 | ) | (6,172 | ) | (6,573 | ) | (5,873 | ) | (5,524 | ) | (5,508 | ) | ||||||||||||
Appraisal value reduction(1) | — | — | — | (245 | ) | — | — | |||||||||||||||||
Operating profit before income tax and abnormal items | 4,295 | 5,638 | 3,843 | 2,976 | 3,572 | 3,405 | ||||||||||||||||||
Income tax expense attributable to operating profit before abnormal items | (1,247 | ) | (1,637 | ) | (1,262 | ) | (958 | ) | (916 | ) | (993 | ) | ||||||||||||
Operating profit after income tax | 3,048 | 4,001 | 2,581 | 2,018 | 2,656 | 2,412 | ||||||||||||||||||
Outside equity interest | (8 | ) | (10 | ) | (9 | ) | (6 | ) | (1 | ) | (14 | ) | ||||||||||||
Net income | 3,040 | 3,991 | 2,572 | 2,012 | 2,655 | 2,398 | ||||||||||||||||||
Dividends declared ($) | 1,092 | 1,434 | 1,315 | 1,066 | 1,913 | 1,720 | ||||||||||||||||||
Weighted average number of shares (basic) | 970 | m | 1,273 | m | 1,256 | m | 1,253 | m | 1,250 | m | 1,260 | m | ||||||||||||
Earnings per share, basic before abnormal items (cents) | 231 | 303.1 | 196.9 | 157.4 | 209.6 | 189.6 | ||||||||||||||||||
Earnings per share, basic after abnormal items (cents) | 231 | 303.1 | 196.9 | 157.4 | 209.6 | 189.6 | ||||||||||||||||||
Earnings per share, fully diluted before abnormal items (cents) | 231 | 303.0 | 196.8 | 157.3 | 209.3 | 189.3 | ||||||||||||||||||
Earnings per share, fully diluted after abnormal items (cents) | 231 | 303.0 | 196.8 | 157.3 | 209.3 | 189.3 | ||||||||||||||||||
Dividends per share (cents) | 150 | 197 | 183 | 154 | 150 | 136 | ||||||||||||||||||
Dividends payout ratio (%)(2) | 50 | 65.2 | 93.5 | 97.7 | 71.7 | 71.2 | ||||||||||||||||||
Adjusted for US GAAP | ||||||||||||||||||||||||
Operating profit after income tax | 2,715 | 3,564 | 2,043 | 3,000 | 1,682 | 1,586 | ||||||||||||||||||
Earnings per share after abnormal items (cents) — basic | 205.2 | 269.3 | 158.3 | 235.7 | 131.5 | 125.2 | ||||||||||||||||||
Earnings per share after abnormal items (cents) — diluted | 205.1 | 269.2 | 158.2 | 235.6 | 131.3 | 125.0 |
(1) | Appraisal value adjustment relating to life insurance business for Financial Year 2003 was a reduction and has been disclosed as an expense. For Financial Year 2005 ($778 million), 2004 ($201 million), 2002 ($477 million) and 2001 ($474 million), appraisal value adjustments were uplifts have been included in non interest income. | |
(2) | Dividends per share divided by earnings per share. | |
(3) | US$ translated from A$ at 30 June 2005 (see table below for rate). | |
(4) | Relates to restructuring costs, net market valuation of funds management businesses and change of valuation bases of Commonwealth Life insurance business |
Year Ended 30 June | ||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
(expressed in US dollars per $1.00) | ||||||||||||||||||||
Period End | 0.7618 | 0.6952 | 0.6713 | 0.5628 | 0.5100 | |||||||||||||||
Average Rate | 0.7534 | 0.7142 | 0.5847 | 0.5236 | 0.5372 |
November | October | September | August | July | June | |||||||||||||||||||
(expressed in US dollars per $1.00) | ||||||||||||||||||||||||
High | 0.7451 | 0.7630 | 0.7731 | 0.7739 | 0.7661 | 0.7792 | ||||||||||||||||||
Low | 0.7267 | 0.7468 | 0.7537 | 0.7469 | 0.7403 | 0.7498 |
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Year ended 30 June | ||||||||||||||||||||||||
2005 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||
(A$ millions, except where indicated) | ||||||||||||||||||||||||
Consolidated Balance Sheet Data | US$M(5) | |||||||||||||||||||||||
(at year end) | ||||||||||||||||||||||||
Australian GAAP | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Cash and liquid assets | 4,354 | 5,715 | 6,453 | 5,575 | 6,044 | 3,709 | ||||||||||||||||||
Receivables due from other financial institutions | 4,727 | 6,205 | 8,369 | 7,066 | 7,728 | 4,622 | ||||||||||||||||||
Trading securities | 11,144 | 14,628 | 14,896 | 10,435 | 8,389 | 6,909 | ||||||||||||||||||
Investment securities | 7,825 | 10,272 | 11,447 | 11,036 | 10,766 | 9,705 | ||||||||||||||||||
Loans, advances and other receivables | 165,704 | 217,516 | 189,391 | 160,347 | 147,074 | 136,059 | ||||||||||||||||||
Bank acceptances of customers | 12,788 | 16,786 | 15,019 | 13,197 | 12,517 | 12,075 | ||||||||||||||||||
Insurance investment assets | 21,206 | 27,837 | 28,942 | 27,835 | 30,109 | 31,213 | ||||||||||||||||||
Deposits with regulatory authorities | 34 | 45 | 38 | 23 | 89 | 61 | ||||||||||||||||||
Property, plant and equipment | 1,024 | 1,344 | 1,204 | 821 | 862 | 919 | ||||||||||||||||||
Investments in associates | 40 | 52 | 239 | 287 | 313 | 400 | ||||||||||||||||||
Intangible Assets | 3,347 | 4,394 | 4,705 | 5,029 | 5,391 | 5,716 | ||||||||||||||||||
Other assets | 18,466 | 24,241 | 25,292 | 23,459 | 20,366 | 19,023 | ||||||||||||||||||
Total Assets | 250,659 | 329,035 | 305,995 | 265,110 | 249,648 | 230,411 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Deposits and other public borrowings | 128,004 | 168,029 | 163,177 | 140,974 | 132,800 | 117,355 | ||||||||||||||||||
Payable due to other financial institutions | 6,112 | 8,023 | 6,641 | 7,538 | 7,864 | 6,903 | ||||||||||||||||||
Bank acceptances | 12,788 | 16,786 | 15,019 | 13,197 | 12,517 | 12,075 | ||||||||||||||||||
Provision for dividend | 11 | 14 | 14 | 12 | 1,040 | 779 | ||||||||||||||||||
Income tax liability | 1,181 | 1,550 | 811 | 876 | 1,276 | 1,355 | ||||||||||||||||||
Other provisions | 671 | 881 | 997 | 819 | 834 | 1,007 | ||||||||||||||||||
Insurance policy liabilities | 18,812 | 24,694 | 24,638 | 23,861 | 25,917 | 27,029 | ||||||||||||||||||
Debt issues | 44,657 | 58,621 | 44,042 | 30,629 | 23,575 | 24,484 | ||||||||||||||||||
Bills payable and other liabilities | 13,778 | 18,086 | 19,140 | 19,027 | 17,342 | 13,872 | ||||||||||||||||||
226,014 | 296,684 | 274,479 | 236,933 | 223,165 | 204,859 | |||||||||||||||||||
Loan capital(1) | 4,792 | 6,291 | 6,631 | 6,025 | 5,427 | 5,704 | ||||||||||||||||||
Total liabilities and loan capital | 230,806 | 302,975 | 281,110 | 242,958 | 228,592 | 210,563 | ||||||||||||||||||
Net Assets | 19,853 | 26,060 | 24,885 | 22,152 | 21,056 | 19,848 | ||||||||||||||||||
Total Shareholders’ Equity(2) | 19,853 | 26,060 | 24,885 | 22,152 | 21,056 | 19,848 | ||||||||||||||||||
Preference share capital | 523 | 687 | 687 | 687 | 687 | 687 | ||||||||||||||||||
Other equity instruments | 1,198 | 1,573 | 737 | — | — | — | ||||||||||||||||||
Total Shareholders’ Equity excluding hybrid financial instruments | 18,131 | 23,800 | 23,461 | 21,465 | 20,369 | 19,161 | ||||||||||||||||||
Adjusted for US GAAP | ||||||||||||||||||||||||
Total Assets | 249,442 | 327,438 | 303,437 | 264,387 | 247,563 | 235,401 | ||||||||||||||||||
Shareholders’ equity(3) | 14,391 | 18,891 | 17,504 | 17,291 | 16,299 | 16,236 | ||||||||||||||||||
Consolidated Operating Data (number) (at year end) | ||||||||||||||||||||||||
Full time staff equivalent(4) | 35,313 | 36,296 35,845 | 35,845 | 37,245 | 37,460 | |||||||||||||||||||
Branches/service centres (Australia) | 1,006 | 1,012 | 1,014 | 1,020 | 1,161 | |||||||||||||||||||
Agencies (Australia) | 3,864 | 3,866 | 3,893 | 3,936 | 3,927 |
(1) | Represents interest bearing liabilities qualifying as regulatory capital. | |
(2) | Including minority interests (see Note 30 to the financial statements for details). | |
(3) | Exclusive of minority interests. | |
(4) | Staff numbers include all permanent full time staff, part time staff equivalents and external contractors employed by third party agencies. | |
(5) | US$ translated from A$ at 30 June 2005 (see table on page 13 for rates). |
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Year ended 30 June | ||||||||||||||||||||||||
2005 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||
(A$ millions, except where indicated) | ||||||||||||||||||||||||
Consolidated Ratios and Operating Data | US$M(6) | |||||||||||||||||||||||
Australian GAAP | ||||||||||||||||||||||||
Profitability | ||||||||||||||||||||||||
Net Interest Margin (%)(1) | 2.45 | 2.53 | 2.67 | 2.76 | 2.78 | |||||||||||||||||||
Interest Spread (%)(2) | 2.11 | 2.22 | 2.40 | 2.47 | 2.32 | |||||||||||||||||||
Return on average shareholders’ equity (%)(3) | 15.67 | 13.00 | 10.73 | 14.67 | 13.50 | |||||||||||||||||||
Return on average total assets (%)(3) | 1.26 | 0.90 | 0.78 | 1.11 | 1.07 | |||||||||||||||||||
Productivity | ||||||||||||||||||||||||
Total operating income per full time (equivalent) employee ($) | 234,906 | 308,357 | 278,047 | 262,212 | 262,856 | 252,400 | ||||||||||||||||||
Staff expense/total operating income (%)(4) | 23.3 | 24.3 | 26.1 | 26.4 | 26.7 | |||||||||||||||||||
Total operating expenses excluding goodwill amortisation/total operating income (%)(4) | 51.5 | 59.6 | 59.1 | 57.4 | 58.6 | |||||||||||||||||||
Ratio of earnings to fixed charges | 1.4 | 1.3 | 1.3 | 1.6 | 1.5 | |||||||||||||||||||
Capital Adequacy (at year end) | ||||||||||||||||||||||||
Risk weighted assets | 144,406 | 189,559 | 169,321 | 146,808 | 141,049 | 138,383 | ||||||||||||||||||
Tier 1 capital | 10,773 | 14,141 | 12,588 | 10,213 | 9,561 | 9,015 | ||||||||||||||||||
Tier 2 capital | 4,637 | 6,087 | 6,658 | 6,177 | 6,040 | 5,784 | ||||||||||||||||||
Total capital(5) | 14,077 | 18,479 | 17,355 | 14,276 | 13,820 | 12,680 | ||||||||||||||||||
Tier 1 capital/risk weighted assets (%) | 7.46 | 7.43 | 6.96 | 6.78 | 6.51 | |||||||||||||||||||
Tier 2 capital/risk weighted assets (%) | 3.21 | 3.93 | 4.21 | 4.28 | 4.18 | |||||||||||||||||||
Total capital/risk weighted assets (%) | 9.75 | 10.25 | 9.73 | 9.80 | 9.16 | |||||||||||||||||||
Average shareholders’ equity/average total assets (%) | 8.03 | 8.24 | 8.39 | 8.51 | 8.06 | |||||||||||||||||||
Adjusted for US GAAP | ||||||||||||||||||||||||
Net income as a percentage of year end: | ||||||||||||||||||||||||
Total assets | 1.09 | 0.67 | 1.13 | 0.68 | 0.67 | |||||||||||||||||||
Shareholders’ equity | 18.86 | 11.67 | 17.35 | 10.32 | 9.77 | |||||||||||||||||||
Dividends as a percentage of net income | 40.24 | 64.37 | 35.52 | 116.36 | 92.21 | |||||||||||||||||||
Shareholders’ equity as a percentage of total assets | 5.77 | 5.77 | 6.54 | 6.58 | 6.89 | |||||||||||||||||||
Ratio of earnings to fixed charges | 1.3 | 1.2 | 1.4 | 1.4 | 1.4 |
(1) | Net interest income divided by average interest earning assets for the year. | |
(2) | Difference between the average interest rate earned and the average interest rate paid on funds. | |
(3) | Calculations based on operating profit after tax and outside equity interests applied to average shareholders’ equity and average total assets respectively. | |
(4) | Total operating income represents net interest income before deducting charges for bad and doubtful debts plus non interest income. | |
(5) | Represents Tier 1 capital and Tier 2 capital less deductions under statutory guidelines imposed by the Reserve Bank of Australia. Refer note 31 of the financial statements for further details. | |
(6) | US$ translated from A$ at 30 June 2005 (see table on page 13 for rates). |
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\
Year ended 30 June | ||||||||||||||||||||||||
2005 | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||
(A$ millions, except where indicated) | ||||||||||||||||||||||||
Consolidated Ratios and Operating Data | US$M(7) | |||||||||||||||||||||||
Australian GAAP | ||||||||||||||||||||||||
Asset Quality Data(1) | ||||||||||||||||||||||||
Non accrual loans(2) | 301 | 395 | 363 | 665 | 943 | 647 | ||||||||||||||||||
Total impaired assets(3) | 286 | 376 | 340 | 639 | 884 | 649 | ||||||||||||||||||
Specific provisions for impairment(4) | 120 | 157 | 143 | 205 | 270 | 234 | ||||||||||||||||||
General provisions for impairment | 1,059 | 1,390 | 1,393 | 1,325 | 1,356 | 1,399 | ||||||||||||||||||
Net impaired assets (net of interest reserved) | 167 | 219 | 197 | 434 | 614 | 415 | ||||||||||||||||||
Total provisions for impairment/average credit risk (%)(5) | 0.5 | 0.6 | 0.7 | 0.8 | 0.8 | |||||||||||||||||||
Charge for bad and doubtful debts/average credit risk (%)(5) | 0.1 | 0.1 | 0.1 | 0.2 | 0.2 | |||||||||||||||||||
Gross impaired assets/credit risk(%)(6) | 0.1 | 0.1 | 0.3 | 0.4 | 0.3 | |||||||||||||||||||
Net impaired assets/total shareholders’ equity (%) | 0.8 | 0.8 | 2.0 | 2.9 | 2.1 | |||||||||||||||||||
General provision for impairment/risk weighted assets (%) | 0.7 | 0.8 | 0.9 | 1.0 | 1.0 |
(1) | All impaired asset balances and ratios are net of interest reserved. | |
(2) | Non accrual facilities comprise any credit risk exposure where a specific provision for impairment has been raised, or is maintained on a cash basis because of significant deterioration in the financial position of the borrower, or where loss of principal or interest is anticipated. | |
(3) | Total impaired assets comprise non accrual loans, restructured loans, Other Real Estate Owned (OREO) assets and Other Assets Acquired Through Security Enforcement (OAATSE). | |
(4) | Specific provisions for impairment include provisions raised against off balance sheet credit risk. | |
(5) | Average credit risk is based on gross credit risk less unearned income. Averages are based on current and previous year end balances. | |
(6) | Gross credit risk less unearned income. | |
(7) | US$ translated from A$ at 30 June 2005 (see tableon page 13 for rates). |
Full Year Ended | ||||||||||||||||
2005 | 2005 | 2004 | 2003 | |||||||||||||
Summary Cash Flow | US$M | $M | $M | $M | ||||||||||||
Net Cash provided by/(used in) operating activities | 3,328 | 4,369 | (2,371 | ) | (2,125 | ) | ||||||||||
Net Cash (used in) investing activities | (18,237 | ) | (23,940 | ) | (31,094 | ) | (11,634 | ) | ||||||||
Net Cash provided by Financing Activities | 13,453 | 17,660 | 34,883 | 12,689 | ||||||||||||
Net (decrease)/increase in cash and cash equivalents | (1,456 | ) | (1,911 | ) | 1,418 | (1,070 | ) | |||||||||
Cash and Cash Equivalents at beginning of period | 2,168 | 2,846 | 1,428 | 2,498 | ||||||||||||
Cash and Cash Equivalents at end of period | 712 | 935 | 2,846 | 1,428 | ||||||||||||
16
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17
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– | Strong volume growth in home lending, up 15% to $140 billion and personal lending, up 19% to $16 billion; | |
– | Relatively stable net interest margin since June 2004 to bring the full year average net interest margin (“NIM”) to 2.45%, eight basis points below the average for the prior year; | |
– | Continued market share growth in the key retail lending products; | |
– | Good cost control, with relatively flat costs, and | |
– | Bad debt expense as a proportion of Risk Weighted Assets remaining at 17 basis points. |
§ | Home lending growth of 20%, underpinned by record sales volumes in both proprietary and broker channels. | |
§ | Strong performance in other personal lending, assisted by enhancements to the Personal Loan product and the launch of a new “Platinum” credit card in March 2004. | |
§ | Improved arrears levels across the retail lending portfolios, notwithstanding strong volume growth. | |
§ | Strong gains in underlying productivity levels, supported by efficiency improvements in operations processing areas and branch operations. | |
§ | Continued growth in online channels, with the Bank’s NetBank service recognised during the year as the number one Internet Banking site in Australia (source:Australian NetGuide magazine May 2004). |
– | Lead roles in a number of new financings, including a $1 billion bond issue for Goldman Sachs and a $1.9 billion Syndicated Standby Revolving and Term Loan Facility for Qantas Airways Ltd. This was the largest Australian dollar syndicated debt raising by an Australian corporate in the market last year; and | |
– | The acquisition of AOT Australia, which the Bank believes will further leverage CommSec’s scale into the institutional market. CommSec continues to be the most active broker by number of transactions on the ASX and has the busiest single purpose website in Australia. |
§ | Growing market share in the business lending market (source:RBA) with strong performance in the institutional and corporate segments with market share increasing to 13.8%. | |
§ | Gained traction in the Transaction Banking segments through some major client wins. Market share in both the top 500 and commercial segments continued to increase (source:East & Partners) with market shares increasing by 28 basis points to 20.9% and 17 basis points to 24.4% respectively. | |
§ | Strong growth in Asset Finance market share (source:Australian Equipment Lessors Association) with market share increasing by 19 basis points to 16.0%. | |
§ | Acted as joint advisor on the acquisition of the Loy Yang A power station. This was a landmark transaction in the energy sector and is the largest secondary market trade sale in the Australian infrastructure sector. |
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§ | Increased after tax operating profit by 21% | |
§ | ASB increased its total advances during the year by 21% to stand at New Zealand $35.0 billion by year end and total assets at year end were up 17%. | |
§ | Net interest earnings was up 14% and other income up 8%, | |
§ | Operating expense increased 5%; however, ASB’s operating expense ratio to total operating income improved to 44.81% from 47.65%. | |
§ | Interest rate margin declined 10 basis points as a result of increased competition. | |
§ | Intense competition in the mortgage market during the year, resulted in increased lending volumes and market share partially offset by the contraction in net interest margin described above. It also accelerated the move by borrowers from floating mortgage rates to fixed rate lending, particularly two-year term. |
§ | Lending growth at well above market rates in the retail, commercial and rural sectors continued throughout the year. Home loan market share increased to 22.2% from 20.6% in June 2003 (Source:Reserve Bank of NZ). | |
§ | Leading customer service in the Banking sector. For the sixth consecutive year, ASB was recognised as the top major retail bank in terms of satisfied and very satisfied customers in the Auckland University Bank Customer Satisfaction survey. For the fifth consecutive year, ASB was rated the top business bank on the same criteria. | |
§ | A focus on technology innovation has led to the ASB website being judged the best Finance website for the second consecutive year by Net Guide Web Awards. | |
§ | The continued focus on process efficiencies has delivered an end-to-end credit card approval process which is faster, at a lower cost, and with improved service delivery. |
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Full Year Ended | ||||||||||||
30/06/05 | 30/06/04 | 30/06/03 | ||||||||||
Key Performance Indicators | $M | $M | $M | |||||||||
Net interest income | 5,966 | 5,410 | 5,026 | |||||||||
Other operating income | 2,915 | 2,846 | 2,627 | |||||||||
Total Operating Income | 8,881 | 8,256 | 7,653 | |||||||||
Initiatives including Which new Bank (1) | 112 | 698 | 201 | |||||||||
Other operating expenses | 4,344 | 4,191 | 3,982 | |||||||||
Total Operating Expenses | 4,456 | 4,889 | 4,183 | |||||||||
Charge for bad and doubtful debts | 322 | 276 | 305 | |||||||||
Net Profit before Income Tax | 4,103 | 3,091 | 3,165 | |||||||||
Income tax expense | 1,220 | 914 | 931 | |||||||||
Outside equity interests | 3 | 1 | — | |||||||||
Net Profit after Income Tax (“cash basis”) | 2,880 | 2,176 | 2,234 | |||||||||
Goodwill amortisation | (303 | ) | (302 | ) | (300 | ) | ||||||
Net Profit after Income Tax (“statutory basis”) | 2,577 | 1,874 | 1,934 | |||||||||
Productivity and other measures | ||||||||||||
Expense to income (%) | 50.2 | 59.2 | 54.7 | |||||||||
Effective corporate tax rate (%) | 29.7 | 29.6 | 29.4 | |||||||||
Balance Sheet | ||||||||||||
Lending assets ($m) | 235,849 | 205,945 | 175,074 | |||||||||
Average interest earning assets ($m) | 243,948 | 214,187 | 188,270 | |||||||||
Average interest bearing liabilities ($m) | 225,592 | 197,532 | 174,737 | |||||||||
Asset Quality | ||||||||||||
Risk weighted assets ($m) | 189,559 | 169,321 | 146,808 | |||||||||
Net impaired assets ($m) | 219 | 197 | 434 | |||||||||
General provision/Risk weighted assets (%) | 0.73 | 0.82 | 0.90 | |||||||||
Total provisions/Gross impaired assets | ||||||||||||
(net of interest reserved) (%) | 411.4 | 451.8 | 239.4 | |||||||||
Bad debt expense/Risk weighted assets (%) | 0.17 | 0.16 | 0.21 |
(1) | June 2005 and June 2004 results reflect the Which new Bank program, June 2003 results include strategic initiatives undertaken and the cost of the June 2002 ESAP paid in October 2002. |
Full Year | ||||||||
30/06/2005 | 30/06/2004 | |||||||
Total Banking Income | $M | $M | ||||||
Australian Retail | 4,679 | 4,292 | ||||||
Premium, Business, Corporate and Institutional and Group Treasury | 2,877 | 2,715 | ||||||
Asia Pacific | 833 | 710 | ||||||
Trading income | 440 | 499 | ||||||
Other | 52 | 40 | ||||||
Total Banking Income | 8,881 | 8,256 | ||||||
Net Interest Income | 5,966 | 5,410 | ||||||
Other Banking Income | 2,915 | 2,846 | ||||||
Total Banking Income | 8,881 | 8,256 | ||||||
– | Australian Retail Banking Services: For the 2005 Financial Year total income increased by 9% from the prior year to $4,679 million, driven largely by higher interest income, with growth in lending assets of 15% while margins remained stable. | |
– | Premium, Business & Corporate and Institutional and Group Treasury: Total income was 6% above the prior full year and reflects improved growth in lending assets.Asia Pacific: The increase in total income by 17% from the prior year reflects the benefits of continued strong lending growth in ASB Bank combined with a stronger New Zealand Dollar. |
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– | Funding Mix: increased reliance on wholesale funding as a result of the strong growth in home lending outpacing retail deposit growth. The impact was to reduce NIM by five basis points. | |
– | Lending Mix: continued strong growth in home loans partially off-set by the increase in home loan securitisation reduced NIM by 1 basis point. | |
– | Other: competition remained strong across all products resulting in margin contraction reducing NIM by 2 basis points. |
§ | Non lending interest earning assets: Non lending interest earning assets increased by $4.7 billion during the year largely as a result of increased liquidity requirements due to balance sheet growth and increased market making activities in Global Markets. This reduced the NIM by six basis points. | |
§ | Funding Mix: The strong growth in home loans outpaced growth in retail deposits, resulting in a higher reliance on wholesale funding. The impact was to reduce NIM by four basis points in the Financial Year 2004. | |
§ | Asset Mix: The continued strong growth in home loan balances compared with other lending reduced margins by three basis points in the Financial Year 2004. | |
§ | Competition: Represents the net impact of pricing changes on asset and liability products. Spreads on housing loans have tightened, offset by improved spreads on deposit products. The net impact of competition is a one basis point reduction in the NIM in the Financial Year 2004. |
– | Commissions and fees increased 6% to $1,595 million driven by increased volumes and completion of major infrastructure transactions (including Tollways) during the first half of the year. Credit card volume increases were driven by increased activity levels, combined with the launch of the Platinum card during March 2004. | |
– | Lending fees increased 4% to $753 million with volume increases in bill and overdraft facilities being the primary drivers. | |
– | Trading Income of $440 million was 12% below the prior year with lower market volatility and difficult trading conditions while lower volumes were recorded across the derivatives and foreign exchange sectors. | |
– | Other Banking Income was relatively flat for the year. Current year income included $52 million due to the change in tax consolidation legislation for leasing. The 2004 Financial Year included profits from strategic assets sales (Bank of Queensland and Fleet Lease) totalling $71 million, partially offset by a $31 million equity accounting loss of an associated entity due to a change in its’ accounting policy. |
§ | Commissions and fees increased by 8% in the Financial Year 2004 to $1,503 million driven by increased volumes. CommSec experienced record trading levels during the year resulting in an increase in commissions of 72%. The acquisition and integration of TD Waterhouse effective 1 May 2003 also contributed to this increase. Spending on credit cards by customers increased by 17% during the year though this was partially offset by the impact of RBA interchange regulations. Included in fees and commissions are personal transaction fees, which are less than 5% of the Bank’s total income. | |
§ | Lending fees increased by 11% in the financial Year 2004 to $724 million. Growth in retail lending fees was the result of the increased activity in home lending, margin lending and overdraft line fees, which was partly offset by increased mortgage broker volumes and valuation fees. Institutional and Business fees increased, reflecting an improvement in market conditions. | |
§ | Trading income was in line with last year at $499 million. | |
§ | Other banking income increased by $41 million in the Financial Year 2004 to $120 million. The Financial Year 2004 included the profit on sale of the Fleet Lease business and Bank of Queensland shares partially offset by equity accounted losses of an associate entity principally related to a change in its accounting policy described above. |
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Table of Contents
– | Average increase of 4% in staff expenses reflecting labour market movements and other inflation-related cost increases; | |
– | Volume growth in the New Zealand Banking operations; | |
– | A stronger New Zealand Dollar contributing an additional $20 million in costs; and | |
– | Increased costs associated with large compliance related projects (e.g. Basel II, International Financial Reporting Standards (IFRS) and Sarbanes Oxley) totalling $35 million for the year ($15 million in 2004). |
§ | Salary increases of 4% awarded under the Enterprise Bargaining Agreement (EBA). | |
§ | The full year effect of establishing the Premium Financial Services business which supported the strong growth in other banking operating income. | |
§ | Increases in volume related expenses including credit card loyalty. | |
§ | Operational (non-lending) losses incurred in retail banking and institutional banking. |
22
Table of Contents
As at | ||||||||
30/06/05 | 30/06/04 | |||||||
Major Balance Sheet Items (gross of impairment) | $M | $M | ||||||
Lending assets — Home Lending | 119,094 | 104,883 | ||||||
Lending assets — Personal Lending | 15,477 | 13,160 | ||||||
Market Share Percentage | ||||||||
Home Loans | 19.9 | 19.3 | (1) | |||||
Credit cards | 22.9 | 22.7 | (2) |
(1) | As at May 2004, Source: APRA/ABS | |
(2) | As at May 2004, Source: Reserve Bank of Australia |
As at | ||||||||
30/06/05 | 30/06/04 | |||||||
Major Balance Sheet Items (gross of impairment) | $M | $M | ||||||
Interest earning lending assets | 51,584 | 45,899 | ||||||
Bank acceptances of customers | 16,786 | 15,019 | ||||||
Cash and other liquid assets | 11,144 | 13,379 | ||||||
Trading & investment securities | 22,057 | 23,884 | ||||||
Market Share Percentage | ||||||||
Business Lending | 13.4 | 13.8 | ||||||
Asset Finance | 16.6 | (2) | 16.8 | (3) | ||||
Transaction Services (Commercial) | 24.8 | (4) | 24.4 | (5) | ||||
Transaction Services (Corporate) | 22.1 | (6) | 20.9 | (7) |
(1) | Includes Group Treasury | |
(2) | Source: Australian Equipment Lessors Association as at May 2005. The comparatives have been restated to now also include other Commonwealth Bank of Australia receivables (previously included CBFC business only) | |
(3) | Source: Australian Equipment Lessors Association | |
(4) | Source: East & Partners as at February 2005. Survey respondents included companies with $20 million to $340 million turnover. | |
(5) | Source: East & Partners as at May 2004. Survey respondents included companies with $20 million to $340 million turnover. | |
(6) | Source: East & Partners as at May 2005. Survey respondents are companies with turnover greater than $340 million | |
(7) | Source: East & Partners as at May 2004. Survey respondents are companies with turnover greater than $340 million |
23
Table of Contents
As at | ||||||||
30/06/05 | 30/06/04 | |||||||
$M | $M | |||||||
Transaction Deposits | 30,501 | 28,887 | ||||||
Savings Deposits | 34,205 | 32,914 | ||||||
Investment Deposits | 52,286 | 47,844 | ||||||
Deposits not bearing Interest | 5,823 | 5,407 | ||||||
Sub Total Deposits (excl CD’s and other) | 122,815 | 115,052 | ||||||
Certificate of Deposits and other(1) | 18,299 | 24,101 | ||||||
Total Deposits (Australia) | 141,114 | 139,153 | ||||||
Debt issues | 51,682 | 38,542 | ||||||
Market Share Percentage | ||||||||
Household Deposits(2) | 29.8 | 30.7 | ||||||
Retail Deposits(3) | 22.9 | 23.6 | ||||||
(1) | Other includes securities sold under agreement to repurchase and short sales. | |
(2) | Source: APRA | |
(3) | Source: RBA |
As at | ||||||||
30/06/05 | 30/06/04 | |||||||
Major Balance Sheet Items (gross of impairment) | $M | $M | ||||||
Home Lending | 20,765 | 16,967 | ||||||
Other Lending assets | 12,132 | 10,018 | ||||||
Trading & investment securities | 2,843 | 2,459 | ||||||
Cash and liquid assets | 821 | 1,481 | ||||||
Debt issues | 6,939 | 5,500 | ||||||
Deposits(1) | 23,006 | 19,176 | ||||||
Market Share Percentage | ||||||||
New Zealand Lending for housing(2) | 23.0 | 22.2 | (3) | |||||
New Zealand Retail Deposits(2) | 19.5 | 17.5 | ||||||
(1) Asia Pacific Deposits exclude deposits held in other overseas countries (30 June 2005, $3,909 million). |
(2) Source: Reserve Bank of NZ. |
(3) Under the current definition used by the RBNZ, the equivalent prior period market share would be 22.4%. |
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Table of Contents
As at | ||||||||
30/06/05 | 30/06/04 | |||||||
Total Banking | $M | $M | ||||||
Interest Earning Assets | ||||||||
Home Loans excl. securitisation | 150,677 | 129,455 | ||||||
Less: Securitisation | (10,818 | ) | (7,605 | ) | ||||
Home Loans | 139,859 | 121,850 | ||||||
Personal | 15,668 | 13,208 | ||||||
Business and Corporate | 63,536 | 55,869 | ||||||
Loans, Advances and Other Receivables(1) | 219,063 | 190,927 | ||||||
Cash and other liquid assets(2) | 10,627 | 13,704 | ||||||
Trading Securities | 14,628 | 14,896 | ||||||
Investment Securities | 10,272 | 11,447 | ||||||
Non Lending Interest Earning Assets | 35,527 | 40,047 | ||||||
Total Interest Earning Assets | 254,590 | 230,974 | ||||||
Other Assets(3) | 74,445 | 75,021 | ||||||
Total Assets | 329,035 | 305,995 | ||||||
Interest Bearing Liabilities | ||||||||
Transaction Deposits | 34,694 | 31,104 | ||||||
Savings Deposits | 38,461 | 37,549 | ||||||
Investment Deposits | 66,087 | 59,693 | ||||||
Certificates of Deposit and other | 21,809 | 28,250 | ||||||
Total Interest Bearing Deposits | 161,051 | 156,596 | ||||||
Deposits not bearing interest | 6,978 | 6,581 | ||||||
Deposits and Other Public Borrowings | 168,029 | 163,177 | ||||||
Due to Other Financial Institutions | 8,023 | 6,641 | ||||||
Debt Issues | 58,621 | 44,042 | ||||||
Loan Capital | 6,291 | 6,631 | ||||||
Sub-Total | 240,964 | 220,491 | ||||||
Other Non Interest Bearing Liabilities | 62,011 | 60,619 | ||||||
Total Liabilities | 302,975 | 281,110 | ||||||
(1) Gross of provisions for impairment, which are included in “other assets”. |
(2) Includes interest earning portion only. Non interest earning portion is included under “other assets”. |
(3) Other assets include Bank acceptances of customers and provision for impairment. |
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Table of Contents
30/06/05 | 30/06/04 | |||||||
Provisions for Impairment | $M | $M | ||||||
General provisions | 1,390 | 1,393 | ||||||
Specific provisions | 157 | 143 | ||||||
Total Provisions | 1,547 | 1,536 | ||||||
Total provisions for impairment as a % of gross impaired assets net of interest reserved | 411.4 | 451.8 | ||||||
Specific provisions for impairment as a % of gross impaired assets net of interest reserved | 41.8 | 42.1 | ||||||
General provisions as a % of risk weighted assets | 0.73 | 0.82 | ||||||
Bad debt expense as a % of risk weighted assets | 0.17 | 0.16 |
- | The majority of growth in credit has been in home loans, which have a lower credit risk than other portfolios; | |
- | The continuing strong asset quality in the business lending book; and | |
- | A level of impaired assets which is lower relative to levels achieved over the past decade. |
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- | Appraisal Value uplift of $301 million, compared to an appraisal value reduction of $95 million in Financial Year 2004; | |
- | Strong funds under administration growth of 12% to $123 billion at 30 June; and | |
- | Tight cost control which limited operating expenses growth including commissions to 1%. |
- | Acquisition of a minority stake in 452 Capital, which is expected to give the Bank access to the rapidly growing boutique (small, specialised) segment of the market; | |
- | Establishment of a new quantitative asset management business (as a joint venture with Acadian Asset Management) (quantitative asset management relies on computer-based models to select stocks and construct portfolios); | |
- | Continuing progress in rationalising legacy systems and products (now down to seven systems from 17 at the start of the program); | |
- | Organisational changes which saw the creation of a discrete asset management business, quite separate from the platform/retail distribution business; and | |
- | Excellent progress in selling funds management products through the Bank network, with productivity of planners up 38% (based on growth in sales generated by network planners). |
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- | Significant savings due to WnB initiatives including the rationalisation of the legacy product systems; | |
- | Redesign and rationalisation of back office functions resulting in lower employee numbers, offset by; | |
- | Average salary increases of 4%. |
§ | Ongoing operating costs; and | |
§ | Volume related costs which vary in relation to the level of business and revenue. |
§ | The exit from non-core products in the UK business; | |
§ | Rationalisation of back office processes; | |
§ | Rationalisation of legacy systems; and | |
§ | Favourable exchange rate movements. |
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Table of Contents
Full Year Ended | ||||||||||||
30/06/05 | 30/06/04 | 30/06/03 | ||||||||||
Key Performance Indicators | $M | $M | $M | |||||||||
Funds Management | ||||||||||||
Operating income — external | 1,261 | 1,158 | 1,115 | |||||||||
Operating income — internal | 10 | 14 | 13 | |||||||||
Total Operating Income | 1,271 | 1,172 | 1,128 | |||||||||
Shareholder investment returns | 33 | 26 | 13 | |||||||||
Policyholder tax expense/(benefits) | 104 | 149 | (62 | ) | ||||||||
Funds Management Income | 1,408 | 1,347 | 1,079 | |||||||||
Other operating expenses | 812 | 806 | 824 | |||||||||
Initiatives including Which new Bank(1) | 36 | 37 | 38 | |||||||||
Total Operating Expenses | 848 | 843 | 862 | |||||||||
Net Profit before Income Tax | 560 | 504 | 217 | |||||||||
Policyholder tax expense/(benefits) | 104 | 149 | (62 | ) | ||||||||
Corporate tax expense | 100 | 79 | 57 | |||||||||
Outside equity interests | 7 | 8 | 6 | |||||||||
Net Profit after Income Tax (“cash basis”) | 349 | 268 | 216 | |||||||||
Goodwill amortisation | (17 | ) | (17 | ) | (18 | ) | ||||||
Appraisal value (reduction)/uplift | 301 | (95 | ) | (291 | ) | |||||||
Net Profit after Income Tax (“statutory basis”) | 633 | 156 | (93 | ) | ||||||||
(1) | June 2005 and June 2004 results reflect the Which new Bank program, while June 2003 results include strategic initiatives undertaken including the one off cost relating to the sale of the custody business. |
Funds Under Administration | ||||||||||||
Funds under administration — average | 116,262 | 105,458 | 99,280 | |||||||||
Net flows | 456 | 846 | (686 | ) | ||||||||
Productivity and Other Measures | ||||||||||||
Operating income to average funds under administration (%) | 1.09 | 1.11 | 1.14 | |||||||||
Expenses to average funds under administration — actual (%) | 0.73 | 0.80 | 0.87 | |||||||||
Effective corporate tax rate (%) | 21.9 | 22.3 | 20.4 |
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- | Continuation of market leading flows into FirstChoice capturing in excess of 25% of the market net flows (Source:Plan for Life, Actuaries and Researches, Australian Retail and Unitised Wholesale Investments Market Share & Dynamics Report dated 31 March 2005); | |
- | Outflows from the cash management product due to competition from attractively priced retail deposit products; | |
- | Outflows in other retail products which include closed legacy products, which was consistent with the prior year; | |
- | Continuing outflows from GDP Equities Plus funds despite the improved investment performance; | |
- | Loss of lower margin cash and indexed wholesale mandates; and | |
- | Good flows into higher margin equity products in the International business. |
Market Share Percentage | 30/06/05 | 30/06/04 | 30/06/03 | |||||||||
Australian Retail — administrator view(1) | 14.8 | 14.4 | (2) | 14.5 | ||||||||
New Zealand(3) | 12.7 | 13.2 | 14.5 | |||||||||
Australian Property(4) | 4.8 | 5.5 | n/a |
(1) | Source: Plan for Life. The administrator view considers market share from the perspective of the company which administers the product, and also includes branded products distributed by separate entities. Prior period market shares have not been restated to reflect the transfer of $3.1 billion of funds into FirstChoice Wholesale (a retail product). | |
(2) | As at March 2004. | |
(3) | Source: Fund Source Research. Prior period market shares have been updated to reflect total FUA rather than retail FUA as previously reported. | |
(4) | Source: UBS Warburg. |
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Full Year Ended 30 June 2005 | ||||||||||||||||||||||||||||
Opening | Closing | |||||||||||||||||||||||||||
Balance(1) | Investment | Acquisitions | Fx & other | Balance | ||||||||||||||||||||||||
30/06/04 | Inflows | Outflows | Income | & Disposals | Movements(2) | 30/06/05 | ||||||||||||||||||||||
Funds Under Administration | $M | $M | $M | $M | $M | $M | $M | |||||||||||||||||||||
FirstChoice & Avanteos(1) | 12,075 | 10,377 | (4,265 | ) | 1,153 | — | (271 | )(1) | 19,069 | |||||||||||||||||||
Cash Management | 4,414 | 2,961 | (3,425 | ) | 232 | — | — | 4,182 | ||||||||||||||||||||
Other Retail | 34,705 | 4,417 | (7,875 | ) | 3,951 | — | 871 | (3) | 36,069 | |||||||||||||||||||
Australian Retail | 51,194 | 17,755 | (15,565 | ) | 5,336 | — | 600 | 59,320 | ||||||||||||||||||||
Wholesale(1) | 23,955 | 10,841 | (13,350 | ) | 3,177 | — | 271 | 24,894 | ||||||||||||||||||||
Property | 12,624 | 1,207 | (1,172 | ) | 1,668 | — | (871 | )(3) | 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 | 109,883 | 39,260 | (38,804 | ) | 13,025 | — | (300 | ) | 123,064 | |||||||||||||||||||
Year Ended 30 June 2004 | ||||||||||||||||||||||||||||
Opening | Closing | |||||||||||||||||||||||||||
Balance | Investment | Acquisitions & | Fx | Balance | ||||||||||||||||||||||||
30/06/03 | Inflows | Outflows | Income | Disposals | Movements(2) | 30/06/04 | ||||||||||||||||||||||
Funds Under Administration | $M | $M | $M | $M | $M | $M | $M | |||||||||||||||||||||
FirstChoice & Avanteos | 4,192 | 5,431 | (1,370 | ) | 757 | — | — | 9,010 | ||||||||||||||||||||
Cash Management | 4,963 | 3,178 | (3,930 | ) | 203 | — | — | 4,414 | ||||||||||||||||||||
Other Retail | 37,749 | 4,893 | (8,820 | ) | 3,916 | — | — | 37,738 | ||||||||||||||||||||
Wholesale | 25,485 | 12,322 | (13,453 | ) | 2,666 | — | — | 27,020 | ||||||||||||||||||||
Property | 11,790 | 2,023 | (2,079 | ) | 890 | — | — | 12,624 | ||||||||||||||||||||
Domestically Sourced | 84,179 | 27,847 | (29,652 | ) | 8,432 | — | — | 90,806 | ||||||||||||||||||||
Internationally Sourced | 14,387 | 7,769 | (5,118 | ) | 1,592 | (255 | ) | 702 | 19,077 | |||||||||||||||||||
Total — Funds Under Administration | 98,566 | 35,616 | (34,770 | ) | 10,024 | (255 | )(4) | 702 | 109,883 | |||||||||||||||||||
Year Ended 30 June 2003 | ||||||||||||||||||||||||||||
Opening | Closing | |||||||||||||||||||||||||||
Balance | Investment | Acquisitions & | Fx | Balance | ||||||||||||||||||||||||
30/06/02 | Inflows | Outflows | Income | Disposals | Movements(2) | 30/06/03 | ||||||||||||||||||||||
Funds Under Administration | $M | $M | $M | $M | $M | $M | $M | |||||||||||||||||||||
FirstChoice & Avanteos | 568 | 4,221 | (614 | ) | 17 | — | — | 4,192 | ||||||||||||||||||||
Cash Management | 5,634 | 1,121 | (1,970 | ) | 178 | — | — | 4,963 | ||||||||||||||||||||
Other Retail | 41,953 | 11,356 | (13,867 | ) | (1,693 | ) | — | — | 37,749 | |||||||||||||||||||
Wholesale | 29,240 | 10,126 | (13,329 | ) | (552 | ) | — | — | 25,485 | |||||||||||||||||||
Property | 8,895 | 963 | (183 | ) | (43 | ) | 2,158 | — | 11,790 | |||||||||||||||||||
Domestically Sourced | 86,290 | 27,787 | (29,963 | ) | (2,093 | ) | 2,158 | — | 84,179 | |||||||||||||||||||
Internationally Sourced | 19,522 | 4,603 | (3,113 | ) | (424 | ) | (5,000 | ) | (1,201 | ) | 14,387 | |||||||||||||||||
Total — Funds Under Administration | 105,812 | 32,390 | (33,076 | ) | (2,517 | ) | (2,842 | ) | (1,201 | ) | 98,566 | |||||||||||||||||
(1) | During the period a wholesale version of FirstChoice was introduced targeted at retail customers. FUA flows to this product are categorised as retail FUA. To ensure consistency, $3.1 billion of existing wholesale business was reclassified from Wholesale to FirstChoice in the opening balance of the current year. During the half year ended 30 June 2005, an amount of $271 million was transferred from FirstChoice to wholesale business. | |
(2) | Includes foreign exchange gains and losses from translation of internationally sourced business. | |
(3) | Aligns classification to source of funds rather than product grouping. | |
(4) | As part of the Sale agreement of the Colonial Life UK business to Winterthur, Winterthur remove some of the funds on 30June 2004. |
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- | Appraisal value uplift of $477 million compared to the uplift of $296 million in The Financial Year 2004 | |
- | Operating income growth of 10% | |
- | In force premium growth of 8% to $1,265 million |
- | Life insurance revenue growth, with life insurance premiums increasing by 5%, despite the loss of a large Group risk mandate; | |
- | Positive claims experience in life insurance products; offset by | |
- | Significant weather related claims in the general insurance portfolio, predominantly attributed to the February Australian Eastern Seaboard storms. |
§ | Premium growth with Life Risk Premiums increased 8%. |
§ | Improved margins in the annuity market as a result of a return to more rational competitive pricing behaviour. |
§ | Robust claims management activity driving enhanced claims expense outcomes despite some large weather related claims in the general insurance segment early in the year. |
- | Continued strengthening of business volumes across all major business lines; | |
- | Further improvements to operations and systems infrastructure; and | |
- | Positive claims experience. |
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§ | Improved risk profile of Hong Kong business following amendments to investment mix, product repricing and product mix; |
§ | Significant reductions in expense levels for the Hong Kong operations; and |
§ | Development of new distribution capabilities. |
§ | Improved investment markets; |
§ | Increased sales across all markets; and |
§ | Expense containment. |
- | Adverse foreign exchange movements, | |
- | Higher staff expenses driven by wage inflation associated with a tighter labour market; and | |
- | Sales volume growth resulting in an increase in commission costs. |
33
Table of Contents
Full Year Ended | ||||||||||||
Summary Financial Performance | 30/06/05 | 30/06/04 | 30/06/03 | |||||||||
(excluding appraisal value (reduction)/uplift) | $M | $M | $M | |||||||||
Insurance | ||||||||||||
Life Insurance Operating Income | 693 | 618 | 551 | |||||||||
General Insurance Operating Income | 54 | 60 | 47 | |||||||||
Total Operating Income | 747 | 678 | 598 | |||||||||
Shareholder investment returns | 204 | 170 | 78 | |||||||||
Policyholder tax | 124 | 54 | 4 | |||||||||
Total Insurance Income | 1,075 | 902 | 680 | |||||||||
Operating expenses | 551 | 517 | 519 | |||||||||
Initiatives including Which new Bank | 2 | 14 | — | |||||||||
Total operating expenses | 553 | 531 | 519 | |||||||||
Net Profit before Income Tax | 522 | 371 | 161 | |||||||||
Income tax expense attributable to: | ||||||||||||
Policyholder | 124 | 54 | 4 | |||||||||
Corporate | 89 | 66 | 28 | |||||||||
Net Profit after Income Tax (“cash basis”) | 309 | 251 | 129 | |||||||||
Goodwill amortisation | (5 | ) | (5 | ) | (4 | ) | ||||||
Appraisal value uplift | 477 | 296 | 46 | |||||||||
Net Profit after Income Tax (“statutory basis”) | 781 | 542 | 171 | |||||||||
Productivity and Other Measures | ||||||||||||
Expenses to average inforce premiums (actual %) | 45.5 | 47.3 | 50.4 | |||||||||
Effective corporate tax rate (%) | 22.4 | 20.8 | 17.8 |
Full Year Ended | ||||||||||||
30/06/05 | 30/06/04 | 30/06/03 | ||||||||||
Sources of Profit from Insurance Activities | $M | $M | $M | |||||||||
The Margin on Services profit from ordinary activities after income tax is represented by: | ||||||||||||
Planned profit margins | 122 | 107 | 104 | |||||||||
Experience variations | 27 | — | (42 | ) | ||||||||
Other | (8 | ) | (8 | ) | (8 | ) | ||||||
General insurance operating margin | 13 | 19 | 11 | |||||||||
Operating margins | 154 | 118 | 65 | |||||||||
After tax shareholder investment returns | 155 | 133 | 64 | |||||||||
Net profit after Income Tax (“cash basis”) | 309 | 251 | 129 | |||||||||
Full Year Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
Australia | New Zealand | Asia | Total | |||||||||||||||||||||||||||||||||||||||||||||
Net Profit after Income Tax | 2005 | 2004 | 2003 | 2005 | 2004 | 2003 | 2005 | 2004 | 2003 | 2005 | 2004 | 2003 | ||||||||||||||||||||||||||||||||||||
(“cash basis”) | $M | $M | $M | $M | $M | $M | $M | $M | $M | $M | $M | $M | ||||||||||||||||||||||||||||||||||||
Operating margins | 94 | 78 | 43 | 52 | 37 | 31 | 8 | 3 | (9 | ) | 154 | 118 | 65 | |||||||||||||||||||||||||||||||||||
Investment earnings on assets in excess of policyholder liabilities | 92 | 101 | 35 | 22 | 18 | 15 | 41 | 14 | 14 | 155 | 133 | 64 | ||||||||||||||||||||||||||||||||||||
Net Profit after Income Tax | 186 | 179 | 78 | 74 | 55 | 46 | 49 | 17 | 5 | 309 | 251 | 129 | ||||||||||||||||||||||||||||||||||||
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Table of Contents
Full Year Ended 30 June 2005 | ||||||||||||||||||||
Opening | Closing | |||||||||||||||||||
Balance | Sales/New | Other | Balance | |||||||||||||||||
30/06/04 | Business | 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 | 94 | 24 | (13 | ) | 8 | 113 | ||||||||||||||
Total | 1,167 | 300 | (215 | ) | 13 | 1,265 | ||||||||||||||
(1) | Consists mainly of foreign exchange movements. |
Full Year Ended 30 June 2004 | ||||||||||||||||||||
Opening | Closing | |||||||||||||||||||
Balance | Sales/New | Other | Balance | |||||||||||||||||
30/06/03 | Business | Lapses | Movements(2) | 30/06/04 | ||||||||||||||||
Annual Inforce Premiums | $M | $M | $M | $M | $M | |||||||||||||||
General Insurance | 196 | 46 | (50 | ) | — | 192 | ||||||||||||||
Personal Life | 626 | 156 | (85 | ) | 6 | 703 | ||||||||||||||
Group Life | 254 | 53 | (34 | ) | (1 | ) | 272 | |||||||||||||
Total | 1,076 | 255 | (169 | ) | 5 | 1,167 | ||||||||||||||
Australia | 771 | 177 | (133 | ) | — | 815 | ||||||||||||||
New Zealand | 221 | 42 | (16 | ) | 11 | 258 | ||||||||||||||
Asia | 84 | 36 | (20 | ) | (6 | ) | 94 | |||||||||||||
Total | 1,076 | 255 | (169 | ) | 5 | 1,167 | ||||||||||||||
(1) | Life Insurance results for both New Zealand and Asia include savings products. Savings products are disclosed within Funds Management for the Australian business. Inforce premium relates to risk business only. | |
(2) | Consists mainly of foreign exchange movements. | |
(3) | General Insurance inforce premiums includes approximately $40 million of badged premium. |
Market Share Percentage — Annual Inforce Premiums | 30/06/05 | 30/06/04 | ||||||
Australia (Total Risk)(3) | 13.8 | 14.8 | (2) | |||||
Australia (Individual Risk)(3) | 13.0 | 12.7 | (1) | |||||
New Zealand(4) | 27.5 | 27.5 | (1) | |||||
Hong Kong(5) | 2.5 | 2.5 | (2) | |||||
(1) | As at May 2004 | |
(2) | As at March 2004 | |
(3) | Source: Plan for Life | |
(4) | Source: ISI Statistics | |
(5) | Source: Hong Kong Insurance Association |
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Table of Contents
Full Year Ended | ||||||||||||
30/06/05 | 30/06/04 | 30/06/03 | ||||||||||
Shareholder Investment Returns | $M | $M | $M | |||||||||
Funds Management Business | 33 | 26 | 13 | |||||||||
Insurance Business | 204 | 170 | 78 | |||||||||
Shareholder Investment Returns before Tax | 237 | 196 | 91 | |||||||||
Taxation | 60 | 44 | 18 | |||||||||
Shareholder Investment Returns after Tax | 177 | 152 | 73 | |||||||||
As at 30 June 2005 | ||||||||||||||||
Australia | New Zealand | Asia | Total | |||||||||||||
Shareholder Investments Asset Mix (%) | % | % | % | % | ||||||||||||
Local equities | 7 | 1 | 5 | 5 | ||||||||||||
International equities | 3 | 6 | 8 | 5 | ||||||||||||
Property | 20 | 5 | 1 | 13 | ||||||||||||
Other | — | 4 | 2 | 1 | ||||||||||||
Growth | 30 | 16 | 16 | 24 | ||||||||||||
Fixed interest | 24 | 54 | 59 | 37 | ||||||||||||
Cash | 46 | 27 | 6 | 33 | ||||||||||||
Other (1) | — | 3 | 19 | 6 | ||||||||||||
Income | 70 | 84 | 84 | 76 | ||||||||||||
Total | 100 | 100 | 100 | 100 | ||||||||||||
As at 30 June 2005 | ||||||||||||||||
Australia | New Zealand | Asia | Total | |||||||||||||
Shareholder Investments Asset Mix ($M) | $M | $M | $M | $M | ||||||||||||
Local equities | 107 | 4 | 30 | 141 | ||||||||||||
International equities | 50 | 26 | 50 | 126 | ||||||||||||
Property | 306 | 19 | 6 | 331 | ||||||||||||
Other | — | 12 | 10 | 22 | ||||||||||||
Growth | 463 | 61 | 96 | 620 | ||||||||||||
Fixed interest | 370 | 224 | 346 | 940 | ||||||||||||
Cash | 684 | 112 | 36 | 832 | ||||||||||||
Other (1) | — | 12 | 109 | 121 | ||||||||||||
Income | 1,054 | 348 | 491 | 1,893 | ||||||||||||
Total | 1,517 | 409 | 587 | 2,513 | ||||||||||||
(1) | Other mainly includes non revenue generating assets |
36
Table of Contents
Life Insurance | ||||||||||||||||||||
Funds | New | |||||||||||||||||||
Management | Australia | Zealand | Asia(1) | Total | ||||||||||||||||
Carrying Value at 30 June 2005 | $M | $M | $M | $M | $M | |||||||||||||||
Shareholders net tangible assets | 500 | 1,017 | 409 | 587 | 2,513 | |||||||||||||||
Value of inforce business | 1,859 | 533 | 359 | — | 2,751 | |||||||||||||||
Embedded Value | 2,359 | 1,550 | 768 | 587 | 5,264 | |||||||||||||||
Value of future new business | 3,096 | 330 | 350 | 22 | 3,798 | |||||||||||||||
Carrying Value | 5,455 | 1,880 | 1,118 | 609 | 9,062 | |||||||||||||||
Increase/(Decrease) in Carrying Value since 30 June 2004 | 316 | 219 | 140 | (15 | ) | 660 | ||||||||||||||
Life Insurance | ||||||||||||||||||||
Funds | New | |||||||||||||||||||
Management | Australia | Zealand | Asia(1) | Total | ||||||||||||||||
Analysis of Movement Since 30 June 2004 | $M | $M | $M | $M | $M | |||||||||||||||
Profits | 349 | 176 | 71 | 50 | 646 | |||||||||||||||
Net Capital movements(2) | (121 | ) | 195 | (79 | ) | 1 | (4 | ) | ||||||||||||
Dividends paid | (213 | ) | (485 | ) | — | (4 | ) | (702 | ) | |||||||||||
Acquisitions(3) | (30 | ) | — | — | — | (30 | ) | |||||||||||||
FX Movements | — | — | 2 | (60 | ) | (58 | ) | |||||||||||||
Change in Shareholders NTA | (15 | ) | (114 | ) | (6 | ) | (13 | ) | (148 | ) | ||||||||||
Acquired excess | 30 | — | — | — | 30 | |||||||||||||||
Net Appraisal value uplift/(reduction) | 301 | 333 | 146 | (2 | ) | 778 | ||||||||||||||
Increase/(Decrease) to 30 June 2005 | 316 | 219 | 140 | (15 | ) | 660 | ||||||||||||||
(1) | The Asian life businesses are not held in a market value environment and are carried at net assets plus any excess representing the difference between appraisal value and net assets at the time of acquisition. This excess, which effectively represents goodwill, is being amortised on a straight line basis over 20 years subject to impairment. Subject to gaining the appropriate regulatory approval, the disposal of the Hong Kong life insurance operations will occur subsequent to 30 June 2005. Refer Note 1 (pp) to the financial statements. | |
(2) | Includes capital injections, transfers and movements in intergroup loans. | |
(3) | Represents the purchase of Symmetry Limited. The goodwill on acquisition is reclassified as acquired excess, representing the difference between appraisal value and net assets at the time of acquisition. |
- | An appraisal value uplift of $778 million, reflecting growth in Funds under Administration, and improved fund flows while persistency levels and claims ratios improved across each of the insurance businesses. | |
The uplift also includes the negative impact of continued uncertainty of future returns of investment markets and industry funds flows; | ||
- | Decrease due to dividends in excess of profits of $56 million; and | |
- | A $62 million decrease in net tangible assets due to net capital and foreign exchange movements. |
37
Table of Contents
2005 | 2004 | 2003 | ||||||||||
$M | $M | $M | ||||||||||
Staff Expenses | ||||||||||||
Salaries and wages | 2,274 | 2,152 | 2,106 | |||||||||
Superannuation contributions | 7 | 8 | 13 | |||||||||
Provisions for employee entitlements | 67 | 41 | 11 | |||||||||
Payroll tax | 115 | 115 | 107 | |||||||||
Fringe benefits tax | 32 | 32 | 26 | |||||||||
Other staff expenses | 104 | 100 | 120 | |||||||||
Comparable business | 2,599 | 2,448 | 2,383 | |||||||||
Initiatives including Which new Bank | 50 | 273 | 155 | |||||||||
Total Staff Expenses (excluding share based compensation) | 2,649 | 2,721 | 2,538 | |||||||||
Share Based Compensation | ||||||||||||
Comparable business | 44 | (1) | 105 | 94 | ||||||||
Initiatives including Which new Bank | — | — | 25 | |||||||||
Total Share Based Compensation | 44 | 105 | 119 | |||||||||
Occupancy and Equipment Expenses | ||||||||||||
Operating lease rentals | 331 | 340 | 354 | |||||||||
Depreciation | ||||||||||||
Buildings | 21 | 21 | 24 | |||||||||
Leasehold improvements | 58 | 55 | 51 | |||||||||
Equipment | 63 | 50 | 53 | |||||||||
Operating lease fixed assets | 8 | — | — | |||||||||
Repairs and maintenance | 71 | 68 | 58 | |||||||||
Other | 61 | 47 | 69 | |||||||||
Comparable business | 613 | 581 | 609 | |||||||||
Initiatives including Which new Bank | 13 | 20 | 3 | |||||||||
Total Occupancy and Equipment Expenses | 626 | 601 | 612 | |||||||||
Information Technology Services | ||||||||||||
Projects and development | 322 | 281 | 194 | |||||||||
Data processing | 248 | 238 | 255 | |||||||||
Desktop | 150 | 159 | 178 | |||||||||
Communications | 204 | 205 | 171 | |||||||||
Software amortisation | 26 | 11 | 78 | |||||||||
Information technology equipment-depreciation | 6 | 1 | 1 | |||||||||
Comparable business | 956 | 895 | 877 | |||||||||
Initiatives including Which new Bank | 52 | 292 | 30 | |||||||||
Total Information Technology Services | 1,008 | 1,187 | 907 | |||||||||
Other Expenses | ||||||||||||
Postage | 112 | 112 | 109 | |||||||||
Stationery | 108 | 114 | 118 | |||||||||
Fees and commissions | 628 | 598 | 551 | |||||||||
Advertising, marketing and loyalty | 288 | 311 | 259 | |||||||||
Other | 349 | 336 | 312 | |||||||||
Comparable business | 1,485 | 1,471 | 1,349 | |||||||||
Initiatives including Which new Bank | 35 | 164 | 26 | |||||||||
Total Other Expenses | 1,520 | 1,635 | 1,375 | |||||||||
Comparable business | 5,697 | 5,500 | 5,312 | |||||||||
Initiatives including Which New Bank | 150 | 749 | 239 | |||||||||
Total Operating Expenses before goodwill amortisation | 5,847 | 6,249 | 5,551 | |||||||||
Appraisal value uplift/(reduction) | 778 | 201 | (245 | ) | ||||||||
Goodwill amortisation | (325 | ) | (324 | ) | (322 | ) | ||||||
Profit from ordinary activities before income tax | 5,638 | 3,843 | 2,976 | |||||||||
(1) | Reduction in share based compensation reflects the cessation of the mandatory component of the equity participation plan in February 2005, which is now paid in cash and included within salaries and wages (refer to Note 29 to the financial statements). |
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§ | Increase in Initiatives including Which new Bank costs by $510 million to $749 million.; and | |
§ | Increase in staff costs by $65 million or 3% due to an increase in level of salaries and wages as provided for in the Enterprise Bargaining Agreement (EBA). |
Staff Numbers as at 30 June | 2005 | 2004 | 2003 | |||||||||
Australia | 27,991 | 29,236 | 29,608 | |||||||||
New Zealand | 4,719 | 4,630 | 4,144 | |||||||||
Other Overseas | 2,603 | 2,430 | 2,093 | |||||||||
Full time staff equivalent | 35,313 | 36,296 | 35,845 | |||||||||
Year Ended 30 June | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Income Tax Expense | $M | $M | $M | |||||||||
Banking | 1,220 | 914 | 931 | |||||||||
Funds Management — Corporate | 100 | 79 | 57 | |||||||||
Insurance — Corporate | 89 | 66 | 28 | |||||||||
Corporate tax | 1,409 | 1,059 | 1,016 | |||||||||
Policyholder | 228 | 203 | (58 | ) | ||||||||
Total Income Tax Expense | 1,637 | 1,262 | 958 | |||||||||
Effective tax rate | ||||||||||||
Banking | 30 | % | 30 | % | 29 | % | ||||||
Funds Management — Corporate | 22 | % | 22 | % | 20 | % | ||||||
Insurance — Corporate | 22 | % | 21 | % | 18 | % |
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40
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§ | Issue of NZ$350 million (AUD$323 million) of Perpetual Preference Shares in December 2004; | |
§ | Issue of $200 million of shares in March 2005 to satisfy the DRP in respect of the interim dividend for 2004/05; and | |
§ | In accordance with APRA guidelines, the estimated issue of $272 million of shares to satisfy the DRP in respect of the final dividend for 2004/05. |
§ | From 1 July 2004, APRA requires banks to deduct certain capitalised expenses from Tier One capital. This change in regulatory requirements resulted in a $107 million decrease in Tier One capital. |
§ | Issue of the Australian dollar equivalent of $1,554 million (Euro Medium Term Notes, Floating Rate Notes and Perpetual Preference Shares)of instruments qualifying for Lower Tier Two capital; | |
§ | A redemption of the equivalent of $1,866 million notes. However, as some of the notes had been amortised in accordance with APRA requirements, the impact was to reduce Tier Two capital in the year to 30 June 2005 by $1,592 million; and | |
§ | Reduction in Tier Two note and bond issues of $319 million resulting from changes in foreign exchange rates (whilst these notes are hedged, the unhedged value is included in the calculation of regulatory capital in accordance with APRA regulations). |
§ | Dividends paid to the Bank from the life insurance and funds management businesses in excess of the dividend paid in respect of the after-tax profits of these businesses (refer to Note 34 to the financial statements). |
GROUP | ||||||||
2005 | 2004 | |||||||
Actual | Actual | |||||||
Risk-Weighted Capital Ratios | % | % | ||||||
Tier One | 7.46 | 7.43 | ||||||
Tier Two | 3.21 | 3.93 | ||||||
Less deductions | (0.92 | ) | (1.11 | ) | ||||
Total | 9.75 | 10.25 | ||||||
Adjusted Common Equity (1) | 4.91 | 4.75 | ||||||
GROUP | ||||||||
2005 | 2004 | |||||||
Regulatory Capital | $M | $M | ||||||
Total Tier One capital | 14,141 | 12,588 | ||||||
Total Tier Two capital | 6,087 | 6,658 | ||||||
Total capital | 20,228 | 19,246 | ||||||
Capital Base | 18,479 | 17,355 | ||||||
(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 Standard & Poor’s methodology. |
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GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Not later than one year | 13 | 44 | 13 | 42 | ||||||||||||
Later than one year but not later than two years | — | 2 | — | — | ||||||||||||
Total Commitments for Capital Expenditure Not Provided for in the Accounts | 13 | 46 | 13 | 42 | ||||||||||||
GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Short term debt issues | 26,344 | 20,401 | 9,500 | 6,127 | ||||||||||||
Long term debt issues | 32,277 | 23,641 | 31,187 | 18,322 | ||||||||||||
Total Debt Issues | 58,621 | 44,042 | 40,687 | 24,449 | ||||||||||||
Short Term Debt Issues | ||||||||||||||||
A$ Promissory Notes | 1,214 | 1,450 | — | — | ||||||||||||
A$ Bank Bills | 624 | 490 | — | — | ||||||||||||
US Commercial Paper | 10,141 | 9,381 | — | — | ||||||||||||
Euro Commercial Paper | 4,976 | 3,638 | 3,065 | 2,498 | ||||||||||||
Long Term Debt Issues with less than one year to maturity | 9,389 | 5,442 | 6,435 | 3,629 | ||||||||||||
Total Short Term Debt Issues | 26,344 | 20,401 | 9,500 | 6,127 | ||||||||||||
Long Term Debt Issues | ||||||||||||||||
US$ Medium Term Notes | 15,358 | 8,790 | 15,680 | 8,146 | ||||||||||||
A$ Medium Term Notes | 4,850 | 4,453 | 6,272 | 2,813 | ||||||||||||
JPY Medium Term Notes | 868 | 734 | 692 | 520 | ||||||||||||
GBP Medium Term Notes | 4,401 | 3,837 | 2,736 | 1,981 | ||||||||||||
Other Currencies Medium Term Notes | 6,596 | 5,583 | 5,807 | 4,822 | ||||||||||||
Offshore Loans (all JPY) | — | 40 | — | 40 | ||||||||||||
Eurobonds | 204 | 204 | — | — | ||||||||||||
Total Long Term Debt Issues | 32,277 | 23,641 | 31,187 | 18,322 | ||||||||||||
Maturity Distribution of Debt Issues | ||||||||||||||||
Less than 3 months | 11,055 | 6,949 | 6,006 | 1,925 | ||||||||||||
3 months to 12 months | 15,288 | 13,452 | 3,493 | 4,202 | ||||||||||||
Between 1 and 5 years | 22,312 | 17,542 | 21,320 | 12,224 | ||||||||||||
Greater than 5 years | 9,966 | 6,099 | 9,868 | 6,098 | ||||||||||||
Total Debt Issues | 58,621 | 44,042 | 40,687 | 24,449 | ||||||||||||
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Programme/Issue Shelf | Outstanding | Programme/Issuing Shelf Type | ||
Australia | ||||
No Limit | A$ 1,619 million | Transferable Certificates of Deposit Programme | ||
No Limit | A$ 25 million | Debt Issuance Programme | ||
No Limit | A$ 3,200 million | Medium Term Note Programme | ||
Euro Market | ||||
US$ 7 billion | US$2,514 million(1) | Euro Commercial Paper Programme | ||
US$ 35 billion | US$26,001 million(1) | Euro Medium Term Note Programme(2) | ||
Japan | ||||
JPY 500 billion | JPY 82 billion | Uridashi shelf(3) | ||
United States | ||||
US$ 12 billion | US$6,284 million | Commercial Paper Programme | ||
US$ 1 billion | US$250 million | Securities Exchange Commission registered shelf |
(1) | Outstandings are recorded at historic exchanges rates (per programme documentation). | |
(2) | ASB Bank Limited is also an issuer under this program. | |
(3) | Amounts are also reflected under the $356 billion Euro Medium Term Note Programme. |
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- | 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. |
- | Statistically Managed Segment | |
- | Comprises exposures that are generally less than $250,000 and is dominated by the housing loan portfolio. Other products in this segment are credit cards, personal loans and some leasing businesses. Credit facilities are approved using scoring and check sheet techniques. | |
- | Risk Rated Segment | |
Comprises all other credit exposures. Management is based on the internal credit risk rating system, which makes an assessment of the potential for default for each exposure and the amount of loss if default should occur. |
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Average VaR | Average VaR | Average VaR | Average VaR | |||||||||||||
During | During | During | During | |||||||||||||
June 2005 | December 2004 | June 2004 | December 2003 | |||||||||||||
VaR Expressed based | Half Year | Half Year | Half Year | Half Year | ||||||||||||
on 97.5% confidence | $M | $M | $M | $M | ||||||||||||
Group | ||||||||||||||||
Interest rate risk | 3.44 | 3.68 | 2.88 | 3.02 | ||||||||||||
Exchange rate risk | 0.26 | 0.58 | 1.09 | 1.24 | ||||||||||||
Implied volatility risk | 0.49 | 0.53 | 0.84 | 0.92 | ||||||||||||
Equities risk | 0.04 | 0.22 | 0.70 | 0.56 | ||||||||||||
Commodities risk | 0.18 | 0.34 | 0.37 | 0.33 | ||||||||||||
Prepayment risk | 0.38 | 0.54 | 0.58 | 0.36 | ||||||||||||
ASB Bank | 0.22 | 0.26 | 0.14 | 0.20 | ||||||||||||
Diversification benefit | (0.98 | ) | (1.64 | ) | (2.49 | ) | (2.51 | ) | ||||||||
4.03 | 4.51 | 4.11 | 4.12 | |||||||||||||
Credit Spread | 4.85 | 4.67 | 4.92 | — | ||||||||||||
Total | 8.88 | 9.18 | 9.03 | 4.12 | ||||||||||||
Average VaR | Average VaR | Average VaR | Average VaR | |||||||||||||
During | During | During | During | |||||||||||||
June 2005 | December 2004 | December 2004 | June 2004 | |||||||||||||
VaR Expressed based | Half Year | Half Year | Half Year | Half Year | ||||||||||||
on 99.0% confidence | $M | $M | $M | $M | ||||||||||||
Group | ||||||||||||||||
Interest rate risk | 4.78 | 4.72 | 3.69 | 3.99 | ||||||||||||
Exchange rate risk | 0.31 | 0.70 | 1.28 | 1.50 | ||||||||||||
Implied volatility risk | 0.73 | 0.70 | 1.04 | 1.26 | ||||||||||||
Equities risk | 0.05 | 0.30 | 0.98 | 0.70 | ||||||||||||
Commodities risk | 0.21 | 0.41 | 0.45 | 0.40 | ||||||||||||
Prepayment risk | 0.38 | 0.54 | 0.58 | 0.36 | ||||||||||||
ASB Bank | 0.32 | 0.34 | 0.19 | 0.25 | ||||||||||||
Diversification benefit | (1.28 | ) | (2.01 | ) | (3.21 | ) | (3.26 | ) | ||||||||
5.50 | 5.70 | 5.00 | 5.20 | |||||||||||||
Credit Spread | 5.75 | 5.54 | 5.84 | — | ||||||||||||
Total | 11.25 | 11.24 | 10.84 | 5.20 | ||||||||||||
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§ | 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. |
- | Inadequate or failed internal processes and methodologies; | |
- | People; | |
- | Systems; or | |
- | External events. |
- | Economic; | |
- | Competitive; | |
- | Social trends; or | |
- | Regulatory. |
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47
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2005 | 2004 | 2003 | ||||||||||
$M | $M | $M | ||||||||||
Management fee paid to the Group | 2 | 3 | 1 | |||||||||
Liquidity facilities utilised by Issuers | — | — | 6 | |||||||||
Derivatives face value provided to Issuers | 51 | 839 | 644 |
§ | 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. |
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Table of Contents
Face Value | Credit Equivalent | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Credit risk related instruments | ||||||||||||||||
Guarantees | 2,438 | 2,230 | 2,438 | 2,230 | ||||||||||||
Standby letters of credit | 321 | 362 | 321 | 362 | ||||||||||||
Bill endorsements | 276 | 308 | 276 | 308 | ||||||||||||
Documentary letters of credit | 185 | 171 | 37 | 34 | ||||||||||||
Performance related contingents | 1,095 | 898 | 547 | 449 | ||||||||||||
Commitments to provide credit | 76,162 | 64,651 | 13,421 | 12,329 | ||||||||||||
Other commitments | 8,279 | 7,158 | 942 | 1,156 | ||||||||||||
Total credit risk related instruments | 88,756 | 75,778 | 17,982 | 16,868 | ||||||||||||
As at 30 June 2005 | ||||||||||||||||||||||||
Carrying | ||||||||||||||||||||||||
Less than 1 year | 1 to 3 year | 3 to 5 years | over 5 years | Total | Value | |||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Guarantees | 2,431 | — | — | 7 | 2,438 | 7.9 | ||||||||||||||||||
Standby letters of Credit | 234 | 17 | 10 | 60 | 321 | 1.0 | ||||||||||||||||||
Bill endorsements | 276 | — | — | — | 276 | 0.9 | ||||||||||||||||||
Documentary letters of credit | 185 | — | — | — | 185 | 0.6 | ||||||||||||||||||
Performance related contingents | 1,095 | — | — | — | 1,095 | 3.5 | ||||||||||||||||||
Total | 4,221 | 17 | 10 | 67 | 4,315 | 13.9 | ||||||||||||||||||
As at 30 June 2004 | ||||||||||||||||||||||||
Carrying | ||||||||||||||||||||||||
Less than 1 year | 1 to 3 year | 3 to 5 years | over 5 years | Total | Value | |||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Guarantees | 2,124 | 1 | 105 | 2,230 | 3.6 | |||||||||||||||||||
Standby letters of Credit | 228 | 75 | 11 | 48 | 362 | 0.6 | ||||||||||||||||||
Bill endorsements | 308 | 308 | 0.5 | |||||||||||||||||||||
Documentary letters of credit | 171 | 171 | 0.3 | |||||||||||||||||||||
Performance related contingents | 897 | 1 | 898 | 1.4 | ||||||||||||||||||||
Total | 3,728 | 76 | 11 | 154 | 3,969 | 6.4 | ||||||||||||||||||
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2005 | 2004 | 2003 | ||||||||||
$M | $M | $M | ||||||||||
Servicing fee | 20 | 15 | 17 | |||||||||
Management fee | 2 | 2 | 2 | |||||||||
Excess servicing fee | 30 | 36 | 30 | |||||||||
Proceeds from sale of mortgage loans | 5,989 | 3,436 | 1,664 | |||||||||
Interest rate swaps | 14 | 27 | 35 | |||||||||
Total cash receipts | 6,055 | 3,516 | 1,748 | |||||||||
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As at 30 June 2005 | ||||||||||||||||||||
Payments due by period | ||||||||||||||||||||
Less than 1 | More than | |||||||||||||||||||
Total | year | 1 - 3 years | 3 - 5 years | 5 years | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
On balance sheet | ||||||||||||||||||||
Debt issues | 58,621 | 26,344 | 13,437 | 8,874 | 9,966 | |||||||||||||||
Deposits and other borrowing | 168,029 | 163,616 | 2,982 | 1,292 | 139 | |||||||||||||||
Loan capital | 6,291 | 392 | 1,033 | 1,405 | 3,461 | |||||||||||||||
Total on balance sheet | 232,941 | 190,352 | 17,452 | 11,571 | 13,566 | |||||||||||||||
Off balance sheet | ||||||||||||||||||||
Credit risk related instruments | 88,756 | 74,186 | 6,386 | 6,727 | 1,457 | |||||||||||||||
Commitments for Capital Expenditure Not Provided for in the Accounts | 13 | 13 | — | — | — | |||||||||||||||
Lease Commitments — Property,Plant and Equipment | 1,146 | 297 | 386 | 249 | 214 | |||||||||||||||
Total off balance sheet | 89,915 | 74,496 | 6,772 | 6,976 | 1,671 | |||||||||||||||
As at 30 June 2005 | ||||||||||||||||||||
Payments due by period | ||||||||||||||||||||
Less than 1 | More than | |||||||||||||||||||
Total | year | 1 - 3 years | 3 - 5 years | 5 years | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
On balance sheet | ||||||||||||||||||||
Debt issues | 44,043 | 20,401 | 12,130 | 5,413 | 6,099 | |||||||||||||||
Deposits and other borrowing | 163,177 | 158,745 | 2,556 | 1,038 | 838 | |||||||||||||||
Loan capital | 6,631 | 458 | 1,073 | 547 | 4,553 | |||||||||||||||
Total on balance sheet | 213,851 | 179,604 | 15,759 | 6,998 | 11,490 | |||||||||||||||
Off balance sheet | ||||||||||||||||||||
Credit risk related instruments | 75,778 | 62,450 | 5,313 | 6,392 | 1,623 | |||||||||||||||
Commitments for Capital Expenditure Not Provided for in the Accounts | 46 | 44 | 2 | — | — | |||||||||||||||
Lease Commitments — Property, Plant and Equipment | 1,148 | 295 | 268 | 378 | 207 | |||||||||||||||
Total off balance sheet | 76,972 | 62,789 | 5,583 | 6,770 | 1,830 | |||||||||||||||
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§ | Commonwealth Bank Employee Share Acquisition Plan; | |
§ | Commonwealth Bank Equity Participation Plan; | |
§ | Commonwealth Bank Equity Reward Plan; and | |
§ | Commonwealth Bank Non-Executive Directors Share Plan. |
52
Table of Contents
- 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. |
53
Table of Contents
- Sales/new business; | ||
- Claims; | ||
- Persistency; and | ||
- Expenses. |
- Sales/new business; | ||
- Margins/business mix; | ||
- Redemptions; and | ||
- Cost to income ratio. |
§ | Life insurance — the methodology used for estimating policy holder liabilities, for deferring costs and valuing controlled entities is markedly different under US GAAP compared to Australian GAAP (results in a $990 million decrease in net income for Financial Year 2005, $270 decrease in net income for Financial Year 2004 and $24 million increase for Financial Year 2003.); | |
§ | Derivatives — Australian GAAP requires derivative hedges of non trading assets and liabilities to be brought to account on an accruals basis, whereas US GAAP requires the fair value of all derivatives to be on the balance sheet (results an increase of $263 for the Financial Year 2005 in net income; results in a decrease of $736 million in net income for Financial Year 2004 and $636 million increase in net income for Financial Year 2003); | |
§ | Pensions — Australian GAAP requires pension expenses for defined benefit pension plans to be accounted for on an incurred basis, whereas US GAAP requires an accrual basis (results in a $62 million decrease in net income for Financial Year 2005, $24 million decrease in net income for Financial Year 2004 and $6 million decrease for Financial Year 2003). For more details in relation to pensions see below. | |
§ | Goodwill amortisation — Australian GAAP requires goodwill to be amortised over its useful life up to a maximum of 20 years. Effective 1 July 2002, goodwill is not amortised under US GAAP but is reviewed for impairment every period end. The goodwill amortisation expense reversed was $325 million for the Financial Year 2005, $324 million for Financial Year 2004 and $322 million for Financial Year 2003. | |
§ | Loan Impairment Provisions — For the Financial Year 2005 the Group has made a number of changes in the approach used to estimate the loan impairment provision. These changes have been introduced to provide a more consistent approach for calculating the estimate of loan impairment under USGAAP and AIFRS. As such a US GAAP adjustment has been recorded for the Financial Year 2005. This results in an increase in loans advances and other receivables of $354 million for the Financial Year 2005 and an increase in other provisions of $25 million. | |
§ | Fin 46 Variable Interest Entities: US GAAP requires the consolidation of variable interest entities if the conditions outlined in the FIN 46 are met. For the year ended 30 June 2005, this resulted in an increase in assets of $566 million, increase in liabilities of $2,139 million, a decrease in shareholders’ equity of $1,460 million and a decrease in income of $76 million. |
54
Table of Contents
Name of Plan | Type | Form of Benefit | ||
Officers’ Superannuation Fund (OSF) | Defined Benefits and Accumulation | Indexed pensions and lump sums | ||
Commonwealth Bank of Australia (UK) Staff Benefits Scheme (CBA(UK)SBS) | Defined Benefits and Accumulation | Indexed pensions and lump sums |
Assumption | 2005 | 2004 | ||||||
Discount Rate (Gross of tax) | 5.10 | % | 6.00 | % | ||||
Compensation increase rate | 4.25 | % | 4.25 | % | ||||
Return on assets | 7.50 | % | 7.50 | % | ||||
Benchmark | Actual | |||||||
Asset Sector | Asset Allocation | Allocation | ||||||
Australian Equities | 27.5 | % | 30.7 | % | ||||
Overseas Equities | 21.0 | % | 21.5 | % | ||||
Real Estate | 15.0 | % | 15.4 | % | ||||
Fixed Interest Securities | 25.5 | % | 24.1 | % | ||||
Cash | 5.0 | % | 4.9 | % | ||||
Other1 | 6.0 | % | 3.4 | % | ||||
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. |
55
Table of Contents
§ | decrease the 1 July 2004 liabilities by $379 million (pre tax) | |
§ | increase the 2004/2005 pension expense by $31 million (pre tax) | |
§ | decrease the 30 June 2005 fund liabilities by $467 million (pre tax) |
§ | increase the 1 July 2004 fund liabilities by $457 million (pre tax) | |
§ | decrease the 2004/2005 pension expense by $28 million (pre tax) | |
§ | increase the 30 June 2005 fund liabilities by $595 million (pre tax) |
56
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Group | Group | |||||||
2005 | 2004 | |||||||
$’000 | $’000 | |||||||
Amounts paid or due and payable for audit services to: | ||||||||
Ernst & Young | 9,166 | 7,714 | ||||||
Other Auditors | 114 | 134 | ||||||
9,280 | 7,848 | |||||||
Amounts paid or due and payable for non-audit services to Ernst & Young: | ||||||||
Audit related services | 832 | 1,113 | ||||||
Taxation services | 16 | 222 | ||||||
All Other services | ||||||||
Corporate finance services | — | 203 | ||||||
Staff assistance services | — | 13 | ||||||
Other services | 327 | 569 | ||||||
1,175 | 2,120 | |||||||
Total Remuneration of Auditors | 10,455 | 9,968 | ||||||
57
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58
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§ | the conversion of the Bank into a public company with a share capital, governed by its Memorandum and Articles of Association but subject to certain overriding provisions of the Banking Act — this conversion occurred on 17 April 1991; | |
§ | the Bank to become the successor in law of the State Bank of Victoria (SBV) – this occurred on 1 January 1991; and | |
§ | the issue of shares in the Bank to the public. |
§ | all demand and term deposits were to be guaranteed by the Commonwealth government for a period of three years from 19 July 1996, when the Commonwealth of Australia ceased to hold more than 50% of the total voting shares in the Bank, 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 before, and was outstanding at 19 July 1996, were to be guaranteed by the Commonwealth Government until their maturity. |
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Table of Contents
§ | Improvement in the Bank’s Occupational Health & Safety systems, to achieve a culture where workplace behaviours ensure the safety and health of all employees, contractors and customers, is a continuing priority. | |
§ | The Bank’s performance management system provides managers and team members with an opportunity to engage in regular conversations about job performance. The system has been aligned more closely with the Bank’s customer service and business objectives. Performance is measured against workplace behaviours as well as business outcomes. The relationship between individual and team performance and recognition and reward has also been strengthened. | |
§ | A program of process simplification is underway which draws on the techniques from “Lean Manufacturing” and “Six Sigma”. These methods support employee engagement by encouraging staff participation in the improvement of work systems which can reduce cycle times and costs. | |
§ | The Bank has continued to use employee equity plans aligned to shareholder interests. One example is the Employee Share Acquisition Plan, which provides staff with a grant of up to $1,000 worth of free shares if the Bank meets its overall performance targets. In eight of the last nine years, an annual grant of shares has been offered to staff. In respect of the Financial Year 2005 all eligible employees will receive shares to the value of $1,000. | |
§ | The Bank’s performance and remuneration systems are reviewed regularly to attempt to ensure good quality people continue to be attracted to the Bank and motivated to excel in customer service. | |
§ | Talent management systems have been enhanced. The role of the level above the direct manager has been simplified while executive reviews of talent have been broadened to enrich the assessment of potential high performers. |
§ | The Bank’s leadership program has been comprehensively redesigned to support the Bank’s People Principles of Clear and Decisive; Empowered and Accountable; Learn and Grow; Trust and Team spirit; Discipline and Excellence; and Challenge and Innovate. |
§ | The annual employee workplace (Gallup) survey, measuring employee engagement, showed the Bank increased its percentile rating from 74th in May 2003 to 77th in May 2005. This is against our target of exceeding the global best practice mark at the 75th percentile. |
§ | As a committed Equal Employment Opportunity (EEO) employer, the Bank has enhanced the quality and accessibility of its EEO resources. It has also introduced a specialist EEO investigations stream into the Fair Treatment Review system. The absence of a difference in responses from male and female staff in the Bank’s annual employee workplace (Gallup) survey suggests that the Bank’s people engagement strategies are contributing to an inclusive workplace culture. |
§ | The Bank has conducted a twice yearly performance culture survey which measures progress against cultural aspirations which were defined as part of the Which new Bank program. |
§ | The Bank has continued to support its extensive range of flexible working practices — for example, part-time work, job share, career break and twelve weeks paid maternity leave. |
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– | The corporate governance of the Bank, including the establishment of Committees; | |
– | Oversight of the business and affairs of the Bank by: |
– | Establishing, with management, the strategies and financial objectives; | ||
– | Approving major corporate initiatives; | ||
– | Establishing appropriate systems of risk management; and | ||
– | Monitoring the performance of management; |
– | Communicating with shareholders and the community, results of, and developments in, the operations of the Bank; | |
– | 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. |
DIRECTOR | BOARD MEMBERSHIP | COMMITTEE MEMBERSHIP | ||||||||||
People & | ||||||||||||
Nominations | Remuneration | Audit | Risk | |||||||||
J M Schubert | Non-executive, Independent | Chairman | Chairman | Member | Member | |||||||
R J Norris(1) | Executive | Chief Executive Officer | Member | |||||||||
D V Murray(1) | Executive | Chief Executive Officer | Member | |||||||||
R J Clairs | Non-executive, Independent | Chairman | Member | |||||||||
A B Daniels | 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 | Non-executive, Independent | Member | Member |
(1) | Mr R J Norris became Chief Executive Officer and Director on 22 September 2005 replacing Mr D V Murray who retired on 22 September 2005. |
– | 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 determined that upon the retirement of Mr Ralph and Mr Adler at the 2004 Annual General Meeting, the number of directors shall be 10; 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. |
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– | 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 otherwise than as a Director of the Bank. |
– | The Board will consist of a majority of independent non-executive Directors and the membership of the Nominations, 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 |
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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; |
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– | 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. Under the policy, the Auditor shall not provide the following services: | |
– | 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. In general terms, the permitted services are: | |
– | 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. |
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– | 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. |
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Date of Ceasing | ||||||
DIRECTOR | Company | Date Appointed | (if applicable) | |||
J M Schubert | BHP Billiton Limited | 01/06/2000 | ||||
BHP Billiton Plc | 29/06/2001 | |||||
Qantas Limited | 23/10/2000 | |||||
Worley Group Limited | 28/11/2002 | 28/02/2005 | ||||
R J Norris | Air New Zealand Limited | 27/08/1998 | 31/08/2005 | |||
Fletcher Building Limited | 18/04/2001 | 9/08/2005 | ||||
R J Clairs | David Jones Limited | 22/02/1999 | ||||
Cellnet Group Limited | 01/07/2004 | |||||
A B Daniels | The Australian Gas Light Company | 04/08/1999 | ||||
Orica Limited | 01/03/1995 | 17/12/2003 | ||||
C R Galbraith | Onesteel Limited | 25/10/2000 | ||||
GasNet Australia Group | 17/12/2001 | |||||
S C H Kay | Mayne Group Limited | 28/09/2001 | ||||
Ansell Limited | 19/05/2000 | 01/11/2002 | ||||
W G Kent | West Australian Newspapers Holdings Limited | 02/02/1998 | ||||
Coventry Group Limited | 01/07/2001 | |||||
Perpetual Trustees Australia Limited (Group) | 01/05/1998 | 31/07/2005 | ||||
F D Ryan | Australian Foundation Investment Company Limited | 08/08/2001 | ||||
F J Swan | Foster's Group Limited | 25/10/1999 | ||||
National Foods Limited | 11/03/1997 | 30/06/2005 | ||||
Southcorp Limited | 26/05/2005 | 29/07/2005 | ||||
B K Ward | Lion Nathan Limited | 20/02/2003 | ||||
Multiplex Group | 26/10/2003 | |||||
Record Investments Limited | 29/04/2005 | |||||
J T Ralph | Telstra Corporation Limited | 14/10/1996 | ||||
BHP Billiton Plc | 01/11/1997 | 04/11/2002 |
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DIRECTORS’ MEETINGS | ||||||||
DIRECTOR | No. of Meetings Held(1) | No. of Meetings Attended | ||||||
J M Schubert | 13 | 13 | ||||||
D V Murray | 13 | 12 | ||||||
R J Clairs | 13 | 13 | ||||||
A B Daniels | 13 | 13 | ||||||
C R Galbraith | 13 | 12 | ||||||
S C H Kay | 13 | 13 | ||||||
W G Kent | 13 | 13 | ||||||
F D Ryan | 13 | 13 | ||||||
F J Swan | 13 | 12 | ||||||
B K Ward | 13 | 13 | ||||||
N R Adler | 4 | 4 | ||||||
J T Ralph | 4 | 4 |
(1) | The number of meetings held during the time the Director held office during the year. |
COMMITTEE MEETINGS | ||||||||||||||||||||||||
People & Remuneration | ||||||||||||||||||||||||
Risk Committee | Audit Committee | Committee | ||||||||||||||||||||||
No. of | No. of | No. of | No. of | No. of | No. of | |||||||||||||||||||
Meetings | Meetings | Meetings | Meetings | Meetings | Meetings | |||||||||||||||||||
DIRECTOR | Held(1) | Attended | Held(1) | Attended | Held(1) | Attended | ||||||||||||||||||
J M Schubert | 6 | 6 | 2 | 2 | 7 | 7 | ||||||||||||||||||
D V Murray | 6 | 6 | ||||||||||||||||||||||
R J Clairs | 6 | 6 | 8 | 6 | ||||||||||||||||||||
A B Daniels | 6 | 5 | 8 | 8 | ||||||||||||||||||||
C R Galbraith | 6 | 6 | 4 | 4 | ||||||||||||||||||||
S C H Kay | 6 | 6 | 5 | 5 | ||||||||||||||||||||
W G Kent | 6 | 6 | 4 | 4 | ||||||||||||||||||||
F D Ryan | 6 | 6 | 6 | 6 | ||||||||||||||||||||
F J Swan | 6 | 4 | ||||||||||||||||||||||
B K Ward | 6 | 6 | 6 | 6 | ||||||||||||||||||||
N R Adler | 2 | 2 | 2 | 2 | ||||||||||||||||||||
J T Ralph | 2 | 2 | 3 | 3 |
NOMINATIONS COMMITTEE | ||||||||
DIRECTOR | No. of Meetings Held(1) | No. of Meetings Attended | ||||||
J M Schubert | 2 | 2 | ||||||
C R Galbraith | 2 | 2 | ||||||
F J Swan | 2 | 2 |
(1) | The number of meetings held during the time the Director was a member of the relevant committee . |
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– | As declared in last year’s report, a fully franked final dividend of 104 cents per share amounting to $1,315 million was paid on 24 September 2004. The payment comprised cash disbursements of $1,069 million with $246 million being reinvested by participants through the Dividend Reinvestment Plan; | |
– | In respect of the current year, a fully franked interim dividend of 85 cents per share amounting to $1,083 million was paid on 31 March 2005. The payment comprised cash disbursements of $883 million with $200 million being reinvested by participants through the Dividend Reinvestment Plan; and | |
– | Additionally, quarterly dividends totalling $39 million for the year were paid on the PERLS; $34 million on the PERLS II; $42 million on the Trust Preferred Securities; $9 million on the ASB Capital preference shares; and $7 million on the ASB Capital No.2 preference shares. |
Progress within the major initiatives included the following:
– | “Commsee,” the new banking customer management platform, as well as providing frontline staff with ready access to imaged client documents and authorities, is making it easier to share customer information. More than half the branches now have CommSee operating and are averaging over 90,000 referrals per month. | |
– | “CommWay” initiatives have led to turnaround time improvements and a significant reduction in home loan and personal loan approval times, through the implementation of end-to-end systems and process improvements. | |
– | A further 127 branches have been refurbished this year, bringing the total number of branches modernised to help provide faster, more efficient service to 253. | |
– | The new NetBank platform was introduced in April 2005 providing enhanced functionality and greater flexibility for 2 million online customers. | |
– | The Wealth Management team achieved its goal of reducing the number of product systems to seven, bringing the total number of product systems decommissioned to 10 since the beginning of Which new Bank. |
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(1) | STI refers to Short Term Incentive. | |
(2) | 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. Refer to page 77 for further detail. | |
(3) | STI deferral applies generally to the CEO and to executives who, in a reporting sense, are no more than two levels removed from the CEO. Payment is subject to forfeiture on resignation or misconduct including misrepresentation of performance outcomes. |
• | Fixed remuneration; | |
• | Short Term Incentive (STI); and | |
• | Long Term Incentive (LTI). |
• | Attract and retain high calibre employees; | |
• | Align individual and Bank goals; and | |
• | Ensure total remuneration is competitive by market standards. |
• | 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. |
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Fixed Component | STI | LTI | ||||||||||
(Base Remuneration and | Component | Component | ||||||||||
Superannuation) | % | % | ||||||||||
% | ||||||||||||
CEO | 25 | 25 | 50 | |||||||||
Group Executives | 30 | 30 | 40 |
• | 50 percent made as immediate cash payment; and |
• | 50 percent 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. |
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2001 Grant | 2002 Grant | 2003 Grant | 2004 Grant | |||||
Performance measurement | ||||||||
From | 3 Sept 2001 | 2 Sept 2002 | 1 Sept 2003 | 23 Aug 2004 | ||||
To | 4 Sept 2004 | 3 Sept 2005 | 2 Sept 2006 | 24 Aug 2007 | ||||
Additional vesting opportunities | Every month from Oct 2004 until Sept 2006 | Every six months from 3 Sept 2005 until | Every six months from 2 Sept 2006 until | Every six months from 24 Aug 2007 until | ||||
2 Sept 2007 | 1 Sept 2008 | 23 Aug 2009 | ||||||
Expiry Date if Exercisable Status as at 30 June 2005 | 3 Sept 2006 Vested on 3 Oct 04 | 2 Sept 2007 30th percentile | 1 Sept 2008 68th percentile | 23 Aug 2009 74th percentile | ||||
Vesting Scale | < Weighted Average of Peers = 0% | < 50th percentile = NIL shares | ||||||
50th — 67th percentile = 50% — 75% of shares | ||||||||
< Weighted Average of Peers = 100% | 68th – 75th percentile = 76% - 100% of shares | |||||||
Performance Hurdle | TSR vs Peer Group. If the performance hurdle is not reached after three years, the options(1) may nevertheless be exercisable or the shares vest, where the hurdle is subsequently reached within five years from the grant date. | 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 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 Bank has not granted options to any Executives since 2001. More information can be found in Note 29 (Share Capital) to the Financial Statements. |
§ | For grants prior to 2002, the TSR of each company in the peer group is weighted by market capitalisation to form an index against which the Bank’s TSR is compared. |
§ | For grants made from 2002 onwards, each company in the peer group and the Bank is ranked in order of TSR growth from the commencement of each grant. A weighting for each company in the peer group is determined by dividing the market capitalisation of the relevant company by the total market capitalisation of the peer group. The Bank’s percentile ranking is determined by aggregating the calculated weighting of each company ranked below the Bank. |
Adelaide Bank | Macquarie Bank | |
AMP | National Australia Bank | |
Australia & New Zealand Banking Group | QBE Insurance | |
AXA | St George | |
Bank of Queensland | Suncorp-Metway | |
Bendigo Bank | Westpac Banking Group | |
IAG |
(7) | GIO and BankWest were included prior to 19 January 2000 and 26 August 2003 respectively. |
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Key Result Area | Commentary | |
Customer Service | The Bank’s vision is ‘to excel in customer service’. There have been substantial service improvements driven from the Which new Bank service transformation program. | |
This result is supported by enhanced customer satisfaction readings, significant customer turnaround time improvements, the implementation of CommSee (in progress and on schedule), an upgraded NetBank, service & sales management training and more branch refurbishments. | ||
The progress in customer service reflects that the Which new Bank program is on schedule. It is expected that the impact during 2005/2006 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 substantial 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 and the success of the Which new Bank program assisting in the achievement of the vision through engaged people. | ||
Business Outcomes | The Bank exceeded its net profit after tax (NPAT) targets for the year ended 30 June 2005. Cash NPAT and underlying NPAT increased by 31% and 13% respectively compared with the previous year. | |
As part of this, the Which new Bank program has exceeded targets with net benefits in 2005 of $724 million. | ||
There were strong results in retail banking, funds management and insurance, tempered by moderate results in institutional and business banking. | ||
These results are supported by market share improvements in most products, productivity gains and return on equity increases. | ||
The Bank has improved market share in home lending (from 19.3% to 19.9%) and retail funds under administration (from 14.4% to 14.8%) in the past 12 months. The Bank has shown strong lending growth in the retail bank and stable net interest margins since 30 June 2004. It has achieved increases in average interest earning assets and home lending balances of 13.9% and 18.5% respectively. |
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Approximate | ||||
Value ($M) | ||||
Statutory Benefits | ||||
Superannuation Benefit | 11.8 | |||
Accrued Statutory Annual and Long Service Leave | 2.3 | |||
Contractual Entitlements | 2.4 | |||
Deferred STI Payments | 1.0 | |||
Total | 17.5 |
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Committee Remuneration | ||||||||||||||||||||
Board | People and | |||||||||||||||||||
Remuneration | 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). |
Non-Executive Directors | Increase in Accrued Benefit in Year | Entitlement as at 30 June 2005 | ||||||
$ | $ | |||||||
J M Schubert | 12,157 | 636,398 | ||||||
R J Clairs | 18,201 | 202,989 | ||||||
A B Daniels | 15,159 | 160,618 | ||||||
C R Galbraith | 8,542 | 159,092 | ||||||
S C H Kay(1) | — | — | ||||||
W G Kent | 8,542 | 159,092 | ||||||
F D Ryan | 12,723 | 168,263 | ||||||
F J Swan | 8,087 | 266,173 | ||||||
B K Ward | 17,225 | 370,180 | ||||||
N R Adler(2) | 12,152 | — | ||||||
J T Ralph(2) | 7,481 | — |
(1) | Ms Kay was appointed a Director after the closure of the scheme. | |
(2) | Messrs Adler and Ralph both retired on 5 November 2004. On retirement, they were paid their accrued entitlements under the Scheme, being $431,211 for Mr Adler and $1,203,960 for Mr Ralph. |
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Individual remuneration details for Directors are set out below.
Remuneration of Directors | ||||||||||||||||||||||||||||||||||||||||||||||||
Post Employment | Other | |||||||||||||||||||||||||||||||||||||||||||||||
Primary Benefits | Benefits | Equity Benefits | Benefits | |||||||||||||||||||||||||||||||||||||||||||||
Year | STI | Term- | Total | |||||||||||||||||||||||||||||||||||||||||||||
ended | Cash STI | Deferred | Super- | Retirement | STI Deferred | LTI | LTI Reward | ination | Remun- | |||||||||||||||||||||||||||||||||||||||
30 June | Cash(1) | Payment | in Cash | annuation(2) | Allowance(3) | in Shares | Options | Shares | NEDSP(1) | Benefits | eration | |||||||||||||||||||||||||||||||||||||
Fixed | At Risk | At Risk | Fixed | Fixed | At Risk | At Risk | At Risk | Fixed | ||||||||||||||||||||||||||||||||||||||||
($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||||||||||||||||
J M Schubert | Chairman | |||||||||||||||||||||||||||||||||||||||||||||||
2005 | 342,987 | — | — | 30,869 | 12,157 | — | — | — | 85,747 | — | 471,760 | |||||||||||||||||||||||||||||||||||||
2004 | 130,545 | — | — | 11,749 | 46,981 | — | — | — | 32,636 | — | 221,911 | |||||||||||||||||||||||||||||||||||||
D V Murray(4) | Managing Director and CEO (see notes to the “Remuneration of Specified Executives” table for details of individual items) | |||||||||||||||||||||||||||||||||||||||||||||||
2005 | 1,757,500 | 760,000 | 760,000 | 142,500 | — | 431,250 | 81,284 | 1,563,504 | — | — | 5,496,038 | |||||||||||||||||||||||||||||||||||||
2004 | 1,680,000 | 450,000 | — | 136,080 | — | 365,000 | 431,666 | 1,363,362 | — | — | 4,426,108 | |||||||||||||||||||||||||||||||||||||
R J Clairs | ||||||||||||||||||||||||||||||||||||||||||||||||
2005 | 139,075 | — | — | 12,517 | 18,201 | — | — | — | 34,769 | — | 204,562 | |||||||||||||||||||||||||||||||||||||
2004 | 86,424 | — | — | 7,778 | 38,988 | — | — | — | 21,606 | — | 154,796 | |||||||||||||||||||||||||||||||||||||
A B Daniels | ||||||||||||||||||||||||||||||||||||||||||||||||
2005 | 131,831 | — | — | 11,865 | 15,159 | — | — | — | 32,958 | — | 191,813 | |||||||||||||||||||||||||||||||||||||
2004 | 86,424 | — | — | 7,778 | 41,663 | — | — | — | 21,606 | — | 157,471 | |||||||||||||||||||||||||||||||||||||
C R Galbraith | ||||||||||||||||||||||||||||||||||||||||||||||||
2005 | 130,220 | — | — | 11,720 | 8,542 | — | — | — | 32,555 | — | 183,037 | |||||||||||||||||||||||||||||||||||||
2004 | 89,460 | — | — | 8,051 | 46,418 | — | — | — | 22,365 | — | 166,294 | |||||||||||||||||||||||||||||||||||||
S C H Kay | ||||||||||||||||||||||||||||||||||||||||||||||||
2005 | 165,976 | — | — | 14,938 | — | — | — | — | 41,494 | — | 222,408 | |||||||||||||||||||||||||||||||||||||
2004 | 97,482 | — | — | 8,773 | — | — | — | — | 24,370 | — | 130,625 | |||||||||||||||||||||||||||||||||||||
W G Kent | ||||||||||||||||||||||||||||||||||||||||||||||||
2005 | 130,220 | — | — | 11,720 | 8,542 | — | — | — | 32,555 | — | 183,037 | |||||||||||||||||||||||||||||||||||||
2004 | 89,460 | — | — | 8,051 | 46,418 | — | — | — | 22,365 | — | 166,294 | |||||||||||||||||||||||||||||||||||||
F D Ryan | ||||||||||||||||||||||||||||||||||||||||||||||||
2005 | 145,398 | — | — | 13,086 | 12,723 | — | — | — | 36,350 | — | 207,557 | |||||||||||||||||||||||||||||||||||||
2004 | 90,435 | — | — | 8,139 | 46,466 | — | — | — | 22,609 | — | 167,649 | |||||||||||||||||||||||||||||||||||||
F J Swan | ||||||||||||||||||||||||||||||||||||||||||||||||
2005 | 124,478 | — | — | 11,203 | 8,087 | — | — | — | 31,119 | — | 174,887 | |||||||||||||||||||||||||||||||||||||
2004 | 89,460 | — | — | 8,051 | 44,429 | — | — | — | 22,365 | — | 164,305 | |||||||||||||||||||||||||||||||||||||
B K Ward | ||||||||||||||||||||||||||||||||||||||||||||||||
2005 | 135,831 | — | — | 12,225 | 17,225 | — | — | — | 33,958 | — | 199,239 | |||||||||||||||||||||||||||||||||||||
2004 | 90,435 | — | — | 8,139 | 51,566 | — | — | — | 22,609 | — | 172,749 | |||||||||||||||||||||||||||||||||||||
N R Adler(5) | ||||||||||||||||||||||||||||||||||||||||||||||||
2005 | 36,333 | — | — | 2,196 | — | — | — | — | 9,083 | 431,211 | 478,823 | |||||||||||||||||||||||||||||||||||||
2004 | 90,435 | — | — | 8,318 | 23,717 | — | — | — | 22,609 | — | 145,079 | |||||||||||||||||||||||||||||||||||||
J T Ralph(5)(6) | ||||||||||||||||||||||||||||||||||||||||||||||||
2005 | 88,881 | — | — | — | — | — | — | — | 22,220 | 1,203,960 | 1,315,061 | |||||||||||||||||||||||||||||||||||||
2004 | 245,887 | — | — | — | 36,479 | — | — | — | 61,472 | — | 343,838 | |||||||||||||||||||||||||||||||||||||
Total Remuneration for Directors | ||||||||||||||||||||||||||||||||||||||||||||||||
2005 | 3,328,730 | 760,000 | 760,000 | 274,839 | 100,636 | 431,250 | 81,284 | 1,563,504 | 392,808 | 1,635,171 | 9,328,222 | |||||||||||||||||||||||||||||||||||||
2004 | 2,866,447 | 450,000 | — | 220,907 | 423,125 | 365,000 | 431,666 | 1,363,362 | 296,612 | — | 6,417,119 | |||||||||||||||||||||||||||||||||||||
(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 29 (Share Capital) to the Financial Statements. | |
(2) | The Bank is not currently contributing to its staff superannuation fund (the Officers’ Superannuation Fund) as the fund is currently in surplus. A notional cost of contribution has been determined on an individual basis for those Non-Executive Directors who are members of that fund. Some Directors have superannuation contributions made to other funds. | |
(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 82 regarding discontinuance of the Scheme. | |
(4) | Refer to page 81 for details of Mr Murray’s termination payments. | |
(5) | Messrs Adler and Ralph both retired on 5 November 2004. | |
(6) | Mr Ralph turned 71 during the year ended 30 June 2004. The Bank’s compulsory superannuation obligations generally cease after a person attains age 70. |
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(7) | The value of LTIs disclosed above was calculated as follows — |
Assumptions | ||||||||||||||||||||||||
Commencement Date | Fair Value | Exercise Price | Risk Free Rate | Term | Dividend Yield | Volatility | ||||||||||||||||||
24 Aug 1999 | $ | 3.14 | $ | 23.84 | 5.82 | % | 37 mths | 4.82 | % | 20.0 | % | |||||||||||||
24 Aug 1999 (CEOs Options) | $ | 3.48 | $ | 23.84 | 5.82 | % | 49 mths | 4.82 | % | 20.0 | % | |||||||||||||
13 Sept 2000 | $ | 3.47 | $ | 26.97 | 6.00 | % | 37 mths | 4.41 | % | 17.9 | % | |||||||||||||
3 Sept 2001 | $ | 4.01 | $ | 30.12 | 5.24 | % | 37 mths | 4.61 | % | 20.8 | % | |||||||||||||
The ‘fair value’ of shares is the Bank’s closing share price at the Commencement Date for each grant, i.e., $27.64 for shares granted on 13 September 2000, $29.50 for shares granted on 3 September 2001, $31.42 for shares granted on 2 September 2002, $27.48 for shares granted on 1 September 2003 and $29.69 for shares granted on 23 August 2004. | ||
As required under AASB 1046 the Bank has estimated the number of options and shares expected to vest in relation to each grant. The assessment has been made as at 30 June 2005 based on the Bank’s performance against the relative hurdle. In respect of options and shares granted in 1999, 2000 and 2001, 100% of the number granted has vested. For shares granted in 2002, 2003 and 2004, the Bank currently anticipates that 50% of the number granted will vest. | ||
The annualised equivalent of the ‘fair value’ in respect of the number of options and shares for each grant that have or are expected to vest, has been amortised on a straight line basis over the period from the Commencement Date until the first possible vesting date — a period of 37 months (49 months in respect of options granted to Mr Murray on 24 August 1999). | ||
(8) | Represents any severance payments made on termination of employment (excluding any payment in lieu of notice). | |
(9) | All Other Benefits payable that are not covered above, including any payment made in lieu of notice on termination of employment and other contractual payments. | |
(10) | Group totals in respect of the financial year ended 30 June 2004 do not necessarily equal the sum of amounts disclosed for individuals specified in 2005 as there are differences to the individuals specified in 2004. |
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Percentage | Percentage | Percentage | Minimum Total | Maximum Total | ||||||||||||||||
Paid(1) | Forfeited | Deferred(2) | Value ($) | Value ($) | ||||||||||||||||
D V Murray | 50 | % | — | 50 | % | 760,000 | 1,520,000 | |||||||||||||
M A Cameron | 50 | % | — | 50 | % | 327,250 | 654,500 | |||||||||||||
L G Cupper | 50 | % | — | 50 | % | 292,500 | 585,000 | |||||||||||||
S I Grimshaw | 50 | % | — | 50 | % | 425,000 | 850,000 | |||||||||||||
H D Harley | 50 | % | — | 50 | % | 357,500 | 715,000 | |||||||||||||
M A Katz | 50 | % | — | 50 | % | 382,500 | 765,000 | |||||||||||||
R V McKinnon | 50 | % | — | 50 | % | 240,000 | 480,000 | |||||||||||||
G L Mackrell | 50 | % | — | 50 | % | 315,000 | 630,000 | |||||||||||||
J K O’Sullivan | 50 | % | — | 50 | % | 295,000 | 590,000 | |||||||||||||
G A Petersen | 50 | % | — | 50 | % | 217,500 | 435,000 | |||||||||||||
(1) | Will be paid on 1 September 2005. | |
(2) | Will vest on 1 July 2006 and be paid in July 2006, subject to not being forfeited due to resignation or misconduct including misrepresentation of performance outcomes. Will generally vest and be immediately payable in circumstances of retrenchment, retirement or death. See page 81 for treatment on Mr Murray’s retirement consistent with this policy. |
Number of | ||||||||||||||||||||||||
Reward | Minimum | Maximum | ||||||||||||||||||||||
Percentage | Percentage | Percentage | Shares | Total Value | Total Value(2) | |||||||||||||||||||
Paid(1) | Forfeited | Deferred(1) | Allocated | ($) | ($) | |||||||||||||||||||
D V Murray | — | — | 100 | % | 125,000 | — | 3,711,250 | |||||||||||||||||
M A Cameron | — | — | 100 | % | 28,130 | — | 835,179 | |||||||||||||||||
L G Cupper | — | — | 100 | % | 25,000 | — | 742,250 | |||||||||||||||||
S I Grimshaw | — | — | 100 | % | 37,500 | — | 1,113,375 | |||||||||||||||||
H D Harley | — | — | 100 | % | 35,000 | — | 1,039,150 | |||||||||||||||||
M A Katz | — | — | 100 | % | 43,130 | — | 1,280,529 | |||||||||||||||||
R V McKinnon | — | — | 100 | % | 18,750 | — | 556,687 | |||||||||||||||||
G L Mackrell | — | — | 100 | % | 28,130 | — | 835,179 | |||||||||||||||||
J K O’Sullivan | — | — | 100 | % | 25,940 | — | 770,158 | |||||||||||||||||
G A Petersen | — | — | 100 | % | 19,500 | — | 578,955 | |||||||||||||||||
(1) | Will vest in 2007/2008, 2008/2009 or 2009/2010 subject to the service conditions and performance hurdle being met (see page 78). 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. See page 81 for treatment on Mr Murray’s retirement consistent with this policy. | |
(2) | This equals the “Number of Reward Shares Allocated” multiplied by the Bank’s closing share price at the Commencement Date of the grant (23 August 2004), which was $29.69. |
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Vested and Exercisable at | ||||||||||||||||||||
30 June 2005(1) | ||||||||||||||||||||
Balance | Exercise | |||||||||||||||||||
Balance | Options | 30 June | Price | |||||||||||||||||
Name | 1 July 2004 | Exercised | 2005 | Number | ($) | |||||||||||||||
Directors | ||||||||||||||||||||
D V Murray | 1,250,000 | (1,000,000 | ) | 250,000 | 250,000 | 30.12 | ||||||||||||||
Total for Directors | 1,250,000 | (1,000,000 | ) | 250,000 | 250,000 | 30.12 | ||||||||||||||
Specified Executives | ||||||||||||||||||||
L G Cupper | 150,000 | (75,000 | ) | 75,000 | 75,000 | 30.12 | ||||||||||||||
S I Grimshaw | 100,000 | — | 100,000 | 100,000 | 30.12 | |||||||||||||||
H D Harley | 87,500 | — | 87,500 | 50,000 | 30.12 | |||||||||||||||
37,500 | 26.97 | |||||||||||||||||||
M A Katz | 250,000 | — | 250,000 | 125,000 | 30.12 | |||||||||||||||
125,000 | 26.97 | |||||||||||||||||||
R V McKinnon | 62,500 | (25,000 | ) | 37,500 | 37,500 | 30.12 | ||||||||||||||
G L Mackrell | 232,500 | (232,500 | ) | — | — | — | ||||||||||||||
Total for Specified Executives | 882,500 | (332,500 | ) | 550,000 | 387,500 | 30.12 | ||||||||||||||
162,500 | 26.97 | |||||||||||||||||||
(1) | For most Executives, ‘Vested and Exercisable’ options represents those granted on 3 September 2001 with an exercise price of $30.12. Messrs Harley and Katz also hold vested but unexercised options granted on 13 September 2000 that have an exercise price of $26.97. |
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Acquired/Granted | On | Net | ||||||||||||||||||||||
Balance | as | Exercise of | Change | Balance | ||||||||||||||||||||
Name | Class | 1 July 2004 | Remuneration(1) | Options | Other(2) | 30 June 2005 | ||||||||||||||||||
Directors | ||||||||||||||||||||||||
J M Schubert | Ordinary | 16,268 | 1,658 | — | 582 | 18,508 | ||||||||||||||||||
D V Murray | Ordinary | 280,833 | — | 1,000,000 | (957,195 | ) | 323,638 | |||||||||||||||||
Deferred STI | 19,427 | 15,078 | — | (12,639 | ) | 21,866 | ||||||||||||||||||
Reward Shares | 242,000 | 125,000 | — | (42,000 | ) | 325,000 | ||||||||||||||||||
R J Clairs | Ordinary | 12,631 | 726 | — | — | 13,357 | ||||||||||||||||||
A B Daniels | Ordinary | 16,392 | 695 | — | 582 | 17,669 | ||||||||||||||||||
C R Galbraith | Ordinary | 7,689 | 672 | — | 463 | 8,824 | ||||||||||||||||||
S C H Kay | Ordinary | 2,980 | 689 | — | — | 3,669 | ||||||||||||||||||
W G Kent | Ordinary | 14,522 | 672 | — | 92 | 15,286 | ||||||||||||||||||
F D Ryan | Ordinary | 6,671 | 759 | — | — | 7,430 | ||||||||||||||||||
F J Swan | Ordinary | 4,996 | 645 | — | 304 | 5,945 | ||||||||||||||||||
B K Ward(3) | Ordinary | 4,914 | 719 | — | 133 | 5,766 | ||||||||||||||||||
N R Adler | Ordinary | 9,490 | 203 | — | 97 | 9,790 | ||||||||||||||||||
J T Ralph | Ordinary | 23,861 | 496 | — | 345 | 24,702 | ||||||||||||||||||
Total For Directors | Ordinary | 401,247 | 7,934 | 1,000,000 | (954,597 | ) | 454,584 | |||||||||||||||||
Deferred STI | 19,427 | 15,078 | — | (12,639 | ) | 21,866 | ||||||||||||||||||
Reward Shares | 242,000 | 125,000 | — | (42,000 | ) | 325,000 | ||||||||||||||||||
(1) | For Non-Executive Directors, represents shares acquired under NEDSP on 30 September 2004, 30 December 2004 and 22 April 2005 by mandatory sacrifice of fees. All shares are subject to a 10 year trading restriction (shares will be tradeable earlier if the Director leaves the Board). See Note 29 (Share Capital) to the Financial Statements for further details on the NEDSP. For Mr Murray, this 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 29 (Share Capital) to the Financial Statements for further details on the EPP. | ||
§ | Reward Shares — granted under the Equity Reward Plan (ERP) on and subject to a performance hurdle. The first possible date for meeting the performance hurdle is 23 August 2007 with the last possible date for vesting being 23 August 2009. See Note 29 (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 (which became Ordinary shares). |
(3) | Ms Ward continued to hold 250 PERLS II securities at 30 June 2005. |
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Balance | Acquired/Granted | Net | Balance | |||||||||||||||||||||
30 June | as | On Exercise | Change | 30 June | ||||||||||||||||||||
Name | Class | 2004 | Remuneration(1) | of Options | Other(2) | 2005 | ||||||||||||||||||
Specified Executives | ||||||||||||||||||||||||
M A Cameron | Ordinary | — | — | — | — | — | ||||||||||||||||||
Deferred STI | 4,797 | 5,696 | — | (2,399 | ) | 8,094 | ||||||||||||||||||
Reward Shares | 32,300 | 28,130 | — | — | 60,430 | |||||||||||||||||||
L G Cupper | Ordinary | 27,206 | — | 75,000 | (57,666 | ) | 44,540 | |||||||||||||||||
Deferred STI | 8,409 | 6,534 | — | (5,558 | ) | 9,385 | ||||||||||||||||||
Reward Shares | 70,000 | 25,000 | — | (11,000 | ) | 84,000 | ||||||||||||||||||
S I Grimshaw | Ordinary | 256 | — | — | 16,109 | 16,365 | ||||||||||||||||||
Deferred STI | 9,503 | 9,382 | — | (4,752 | ) | 14,133 | ||||||||||||||||||
Reward Shares | 90,300 | 37,500 | — | (14,000 | ) | 113,800 | ||||||||||||||||||
H D Harley | Ordinary | 13,711 | — | — | 12,141 | 25,852 | ||||||||||||||||||
Deferred STI | 6,816 | 7,707 | — | (4,282 | ) | 10,241 | ||||||||||||||||||
Reward Shares | 57,700 | 35,000 | — | (7,000 | ) | 85,700 | ||||||||||||||||||
M A Katz(3) | Ordinary | 407,386 | — | — | (103,638 | ) | 303,748 | |||||||||||||||||
Deferred STI | 12,706 | 9,717 | — | (8,362 | ) | 14,061 | ||||||||||||||||||
Reward Shares | 114,000 | 43,130 | — | (18,000 | ) | 139,130 | ||||||||||||||||||
R V McKinnon | Ordinary | 9,292 | — | 25,000 | 9,699 | 43,991 | ||||||||||||||||||
Deferred STI | 6,507 | 4,775 | — | (4,199 | ) | 7,083 | ||||||||||||||||||
Reward Shares | 45,500 | 18,750 | — | (5,500 | ) | 58,750 | ||||||||||||||||||
G L Mackrell | Ordinary | 21,088 | — | 232,500 | (226,269 | ) | 27,319 | |||||||||||||||||
Deferred STI | 8,619 | 6,785 | — | (5,270 | ) | 10,134 | ||||||||||||||||||
Reward Shares | 66,100 | 28,130 | — | (11,000 | ) | 83,230 | ||||||||||||||||||
J K O’Sullivan | Ordinary | 5,565 | — | — | — | 5,565 | ||||||||||||||||||
Deferred STI | — | 6,702 | — | — | 6,702 | |||||||||||||||||||
Reward Shares | 33,500 | 25,940 | — | — | 59,440 | |||||||||||||||||||
G A Petersen | Ordinary | 2,756 | — | — | 5,816 | 8,572 | ||||||||||||||||||
Deferred STI | 4,086 | 3,701 | — | (2,610 | ) | 5,177 | ||||||||||||||||||
Reward Shares | 19,000 | 19,500 | — | (3,000 | ) | 35,500 | ||||||||||||||||||
Ordinary | 487,260 | — | 332,500 | (343,808 | ) | 475,952 | ||||||||||||||||||
Total for Specified Executives | Deferred STI | 61,443 | 60,999 | — | (37,432 | ) | 85,010 | |||||||||||||||||
Reward Shares | 528,400 | 261,080 | — | (69,500 | ) | 719,980 | ||||||||||||||||||
(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 29 (Share Capital) 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 23 August 2007 with the last possible date for vesting being 23 August 2009. See Note 29 (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 Executives and vesting of Deferred STI and Reward Shares (which became Ordinary shares). |
(3) | Mr Katz continued to hold 250 PERLS II securities at 30 June 2005. |
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Shares Granted on Exercise of Options | ||||||||||||||||||||||||
Value in | ||||||||||||||||||||||||
Excess of | Total Value | |||||||||||||||||||||||
Reward | Exercise | Exercise | of Options | |||||||||||||||||||||
Deferred STI | Shares | Price | Price(1) | Exercised(2) | ||||||||||||||||||||
Name | Vested | Vested | Number | ($) | ($) | ($) | ||||||||||||||||||
Directors | ||||||||||||||||||||||||
D V Murray | 12,639 | 42,000 | 1,000,000 | 23.84 | 6.61 | 6,610,000 | ||||||||||||||||||
Total Directors | 12,639 | 42,000 | 1,000,000 | NA | NA | 6,610,000 | ||||||||||||||||||
Specified Executives | ||||||||||||||||||||||||
M A Cameron | 2,399 | — | — | — | — | — | ||||||||||||||||||
L G Cupper | 5,558 | 11,000 | 75,000 | 26.97 | 8.92 | 669,000 | ||||||||||||||||||
S I Grimshaw | 4,752 | 14,000 | — | — | — | — | ||||||||||||||||||
H D Harley | 4,282 | 7,000 | — | — | — | — | ||||||||||||||||||
M A Katz | 8,362 | 18,000 | — | — | — | — | ||||||||||||||||||
R V McKinnon | 4,199 | 5,500 | 25,000 | 26.97 | 4.28 | 107,000 | ||||||||||||||||||
G L Mackrell | 5,270 | 11,000 | 100,000 | 23.84 | 7.61 | 761,000 | ||||||||||||||||||
57,500 | 26.97 | 4.85 | 278,875 | |||||||||||||||||||||
75,000 | 30.12 | 5.77 | 432,750 | |||||||||||||||||||||
G A Petersen | 2,610 | 3,000 | — | — | — | — | ||||||||||||||||||
Total Specified Executives | 37,432 | 69,500 | 332,500 | NA | NA | 2,248,625 | ||||||||||||||||||
(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. |
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Interest | ||||||||||||||||||||||||||||
Year | Balance | Interest | Not | Balance | Number in | |||||||||||||||||||||||
Ended | 1 July | Charged | Charged | Write-off | 30 June | Group at | ||||||||||||||||||||||
June 30 | $000s | $000s | $000s | $000s | $000s | 30 June | ||||||||||||||||||||||
Directors | ||||||||||||||||||||||||||||
2005 | 2 | — | — | — | 3 | 1 | ||||||||||||||||||||||
2004 | 36 | 3 | — | — | 22 | 2 | ||||||||||||||||||||||
Specified Executives | ||||||||||||||||||||||||||||
2005 | 8,706 | 523 | — | — | 8,803 | 6 | ||||||||||||||||||||||
2004 | 4,633 | 377 | — | — | 8,829 | 6 | ||||||||||||||||||||||
Total Directors and Specified Executives | ||||||||||||||||||||||||||||
2005 | 8,708 | 523 | — | — | 8,806 | 7 | ||||||||||||||||||||||
2004 | 4,669 | 380 | — | — | 8,851 | 8 | ||||||||||||||||||||||
Highest | ||||||||||||||||||||||||
Balance | Interest | Interest Not | Balance | Balance in | ||||||||||||||||||||
1 July 2004 | Charged | Charged | Write-off | 30 June 2005 | Period | |||||||||||||||||||
$000s | $000s | $000s | $000s | $000s | $000s | |||||||||||||||||||
Directors | ||||||||||||||||||||||||
Not Applicable | ||||||||||||||||||||||||
Specified Executives | ||||||||||||||||||||||||
S I Grimshaw | 1,543 | 90 | — | — | 1,485 | 1,543 | ||||||||||||||||||
H D Harley | 335 | 24 | — | — | 332 | 338 | ||||||||||||||||||
202 | 11 | — | — | — | 202 | |||||||||||||||||||
272 | 10 | — | — | — | 343 | |||||||||||||||||||
185 | 10 | — | — | — | 185 | |||||||||||||||||||
250 | 13 | — | — | 243 | 252 | |||||||||||||||||||
321 | 26 | — | — | 347 | 347 | |||||||||||||||||||
M A Katz | 175 | 12 | — | — | 175 | 175 | ||||||||||||||||||
175 | 8 | — | — | 175 | 175 | |||||||||||||||||||
— | 14 | — | — | 500 | 500 | |||||||||||||||||||
G L Mackrell | 58 | 2 | — | — | — | 190 | ||||||||||||||||||
295 | 12 | — | — | — | 296 | |||||||||||||||||||
— | <1 | — | — | 1,080 | 1,080 | |||||||||||||||||||
146 | 4 | — | — | — | 147 | |||||||||||||||||||
J K O’Sullivan | 1,500 | 97 | — | — | 1,500 | 1,500 | ||||||||||||||||||
200 | 13 | — | — | 392 | 395 | |||||||||||||||||||
861 | 53 | — | — | 696 | 861 | |||||||||||||||||||
258 | 15 | — | — | 208 | 268 | |||||||||||||||||||
G A Petersen | 900 | 40 | — | — | 400 | 900 | ||||||||||||||||||
800 | 52 | — | — | 800 | 800 | |||||||||||||||||||
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92
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$’000 | ||||
Regulatory audits, reviews, attestations and assurances for Group entities — Australia | 1,245 | |||
Regulatory audits, reviews, attestations and assurances for Group entities — Off-shore | 204 | |||
Financial and other audits, reviews, attestations and assurances for Group entities — Australia | 145 | |||
Financial and other audits, reviews, attestations and assurances for Group entities — Off-shore | 8 | |||
Assurance services relating to Sarbanes-Oxley legislation compliance | 417 | |||
Agreed upon procedures and comfort letters in respect of financing, debt raising and related activities | 58 | |||
Due diligence and transactional services | 220 | |||
Taxation services | 10 | |||
Other | 113 | |||
Total | 2,420 | (1) | ||
(1) | An additional amount of $3,305,000 was paid to Ernst & Young by way of fees paid for Non-Audit Services provided to entities not consolidated into the Financial Statements. These relate predominately to audits, reviews, attestations and assurances for managed investment schemes and superannuation funds. |
— | 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. |
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2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
Financial Performance | ||||||||||||||||||||
Net interest income | 5,966 | 5,410 | 5,026 | 4,710 | 4,474 | |||||||||||||||
Other operating income | 5,388 | 5,081 | 4,373 | 4,358 | 4,350 | |||||||||||||||
Total operating income | 11,354 | 10,491 | 9,399 | 9,068 | 8,824 | |||||||||||||||
Charge for bad and doubtful debts | 322 | 276 | 305 | 449 | 385 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Comparable business | 5,697 | 5,500 | 5,312 | 5,201 | 5,170 | |||||||||||||||
Which new Bank | 150 | 749 | 239 | — | — | |||||||||||||||
5,847 | 6,249 | 5,551 | 5,201 | 5,170 | ||||||||||||||||
Operating profit before goodwill amortisation, appraisal value uplift and income tax expense | 5,185 | 3,966 | 3,543 | 3,418 | 3,269 | |||||||||||||||
Income tax expense | (1,637 | ) | (1,262 | ) | (958 | ) | (916 | ) | (993 | ) | ||||||||||
Outside equity interests | (10 | ) | (9 | ) | (6 | ) | (1 | ) | (14 | ) | ||||||||||
Net profit after tax (“cash basis”) | 3,538 | 2,695 | 2,579 | 2,501 | 2,262 | |||||||||||||||
Appraisal value uplift/(reduction) | 778 | 201 | (245 | ) | 477 | 474 | ||||||||||||||
Goodwill amortisation | (325 | ) | (324 | ) | (322 | ) | (323 | ) | (338 | ) | ||||||||||
Operating profit after income tax attributable to members of the Bank | 3,991 | 2,572 | 2,012 | 2,655 | 2,398 | |||||||||||||||
Contributions to profit (after tax) | ||||||||||||||||||||
Banking | 2,959 | 2,675 | 2,376 | 2,067 | 1,793 | |||||||||||||||
Funds management | 351 | 274 | 233 | 368 | 323 | |||||||||||||||
Insurance | 156 | 129 | 65 | 33 | 20 | |||||||||||||||
Profit on operations ( “underlying basis” )(1) | 3,466 | 3,078 | 2,674 | 2,468 | 2,136 | |||||||||||||||
Shareholder investment returns | 177 | 152 | 73 | 33 | 126 | |||||||||||||||
Which new Bank | (105 | ) | (535 | ) | (168 | ) | — | — | ||||||||||||
Profit on operations (“cash basis”) | 3,538 | 2,695 | 2,579 | 2,501 | 2,262 | |||||||||||||||
Goodwill amortisation | (325 | ) | (324 | ) | (322 | ) | (323 | ) | (338 | ) | ||||||||||
Appraisal value uplift/(reduction) | 778 | 201 | (245 | ) | 477 | 474 | ||||||||||||||
Operating profit after income tax | 3,991 | 2,572 | 2,012 | 2,655 | 2,398 | |||||||||||||||
Financial Position | ||||||||||||||||||||
Loans, advances and other receivables | 217,516 | 189,391 | 160,347 | 147,074 | 136,059 | |||||||||||||||
Total assets | 329,035 | 305,995 | 265,110 | 249,648 | 230,411 | |||||||||||||||
Deposits and other public borrowings | 168,029 | 163,177 | 140,974 | 132,800 | 117,355 | |||||||||||||||
Total liabilities | 302,975 | 281,110 | 242,958 | 228,592 | 210,563 | |||||||||||||||
Shareholders’ equity | 24,271 | 22,405 | 20,024 | 19,030 | 18,393 | |||||||||||||||
Net tangible assets | 19,877 | 17,700 | 14,995 | 13,639 | 12,677 | |||||||||||||||
Risk weighted assets | 189,559 | 169,321 | 146,808 | 141,049 | 138,383 | |||||||||||||||
Average interest earning assets | 243,948 | 214,187 | 188,270 | 170,634 | 160,607 | |||||||||||||||
Average interest bearing liabilities | 225,592 | 197,532 | 174,737 | 157,105 | 145,978 | |||||||||||||||
Assets (on balance sheet) | ||||||||||||||||||||
Australia | 271,596 | 252,652 | 221,248 | 208,673 | 196,918 | |||||||||||||||
New Zealand | 41,650 | 35,059 | 27,567 | 24,579 | 20,208 | |||||||||||||||
Other | 15,789 | 18,284 | 16,295 | 16,396 | 13,285 | |||||||||||||||
Total Assets | 329,035 | 305,995 | 265,110 | 249,648 | 230,411 | |||||||||||||||
(2) | “Underlying basis” excludes shareholder investment returns, initiatives including Which new Bank, goodwill amortisation and appraisal value uplift/(reduction) |
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2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Shareholder Summary | ||||||||||||||||||||
Dividends per share (cents) — fully franked | 197 | 183 | 154 | 150 | 136 | |||||||||||||||
Dividend cover (times) — statutory | 1.5 | 1.1 | 0.9 | 1.4 | 1.4 | |||||||||||||||
Dividend cover (times) — cash | 1.4 | 1.1 | 1.3 | 1.3 | 1.3 | |||||||||||||||
Dividend cover (times) — underlying | 1.3 | 1.3 | 1.4 | 1.3 | 1.2 | |||||||||||||||
Earnings per share (cents) | ||||||||||||||||||||
Basic | ||||||||||||||||||||
Statutory | 303.1 | 196.9 | 157.4 | 209.6 | 189.6 | |||||||||||||||
Cash basis(1) | 267.6 | 206.6 | 202.6 | 197.3 | 178.8 | |||||||||||||||
Underlying basis (2) | 261.9 | 237.1 | 210.2 | 194.6 | 168.8 | |||||||||||||||
Fully Diluted | ||||||||||||||||||||
Statutory | 303.0 | 196.8 | 157.3 | 209.3 | 189.3 | |||||||||||||||
Cash basis(1) | 267.5 | 206.5 | 202.5 | 197.0 | 178.6 | |||||||||||||||
Underlying basis (2) | 261.8 | 237.0 | 210.0 | 194.3 | 168.5 | |||||||||||||||
Dividend payout ratio (%)(3) | ||||||||||||||||||||
Statutory | 65.2 | 93.5 | 97.7 | 71.7 | 71.2 | |||||||||||||||
Cash basis(1) | 73.9 | 89.1 | 75.9 | 76.2 | 75.5 | |||||||||||||||
Underlying basis (2) | 75.5 | 77.6 | 73.3 | 77.2 | 80.2 | |||||||||||||||
Net tangible assets per share ($) | 13.8 | 12.2 | 11.4 | 10.3 | 9.6 | |||||||||||||||
Weighted average number of shares (basic) (M) | 1,273 | 1,256 | 1,253 | 1,250 | 1,260 | |||||||||||||||
Weighted average number of shares (fully diluted) (M) | 1,274 | 1,257 | 1,254 | 1,252 | 1,262 | |||||||||||||||
Number of shareholders | 704,906 | 714,901 | 746,073 | 722,612 | 709,647 | |||||||||||||||
Share prices for the year ($) | ||||||||||||||||||||
Trading high | 38.52 | 33.54 | 32.75 | 34.94 | 34.15 | |||||||||||||||
Trading low | 28.79 | 27.00 | 23.05 | 24.75 | 26.18 | |||||||||||||||
End (closing price) | 37.95 | 32.58 | 29.55 | 32.93 | 34.15 | |||||||||||||||
Performance Ratios (%) | ||||||||||||||||||||
Return on average shareholders’ equity(4) (5) (8) | ||||||||||||||||||||
Statutory | 18.3 | 12.5 | 10.5 | 14.7 | 13.5 | |||||||||||||||
Cash basis(1) | 16.0 | 12.7 | 13.1 | 12.9 | 12.1 | |||||||||||||||
Underlying basis(2) | 15.6 | 14.6 | 13.6 | 12.8 | 11.3 | |||||||||||||||
Return on average total assets(4) | ||||||||||||||||||||
Statutory | 1.3 | 0.9 | 0.8 | 1.1 | 1.1 | |||||||||||||||
Cash basis(1) | 1.1 | 0.9 | 1.0 | 1.0 | 1.0 | |||||||||||||||
Underlying basis(2) | 1.1 | 1.1 | 1.0 | 1.0 | 1.0 | |||||||||||||||
Capital adequacy — Tier 1 | 7.46 | 7.43 | 6.96 | 6.78 | 6.51 | |||||||||||||||
Capital adequacy — Tier 2 | 3.21 | 3.93 | 4.21 | 4.28 | 4.18 | |||||||||||||||
Deductions | (0.92 | ) | (1.11 | ) | (1.44 | ) | (1.26 | ) | (1.53 | ) | ||||||||||
Capital adequacy — Total | 9.75 | 10.25 | 9.73 | 9.80 | 9.16 | |||||||||||||||
Net interest margin | 2.45 | 2.53 | 2.67 | 2.76 | 2.78 | |||||||||||||||
Other Information (numbers) | ||||||||||||||||||||
Full time staff equivalent(6) | 35,313 | 36,296 | 35,845 | 37,245 | 37,460 | |||||||||||||||
Branches/service centres (Australia) | 1,006 | 1,012 | 1,014 | 1,020 | 1,066 | |||||||||||||||
Agencies (Australia) | 3,864 | 3,866 | 3,893 | 3,936 | 3,928 | |||||||||||||||
ATMs (Proprietary) | 3,154 | 3,109 | 3,116 | 3,049 | 2,931 | |||||||||||||||
EFTPOS terminals | 137,240 | 126,049 | 129,959 | 126,613 | 122,074 | |||||||||||||||
EzyBanking | 841 | 815 | 760 | 730 | 659 | |||||||||||||||
Productivity | ||||||||||||||||||||
Total Operating Income per full-time (equivalent) employee ($) | 308,357 | 278,047 | 262,212 | 243,469 | 235,558 | |||||||||||||||
Staff Expense/Total Operating Income (%) | 23.3 | 24.3 | 26.4 | 26.4 | 26.7 | |||||||||||||||
Total Operating Expenses(7) /Total Operating Income (%) | 51.5 | 59.6 | 59.1 | 57.4 | 58.6 |
(1) | “Cash basis” for the purpose of these financial statements is defined as net profit after tax and before, goodwill amortisation and life insurance and funds management appraisal value uplift. | |
(2) | “Underlying earnings” for the purpose of these financial statements is defined as net profit after tax and before shareholder investment returns, initiatives including Which new Bank, goodwill amortisation and life insurance and funds management appraisal value uplift. | |
(3) | Dividends paid divided by earnings less preference dividends. | |
(4) | Calculations based on operating profit after tax and outside equity interests applied to average shareholders’ equity/average total assets. | |
(5) | 2005, 2004 and 2003 shareholders’ equity includes retained earnings before provision for final dividend of $1,434 million, $1,315 million and $1,066 million respectively. Prior periods’ return on average shareholders’ equity — cash basis and underlying basis have been restated to exclude the provision for final dividend. | |
(6) | Staff numbers include all permanent full time staff, part time staff equivalents and external contractors employed by third party agencies. | |
(7) | Total Operating Expenses excluding goodwill amortisation and charge for bad and doubtful debts. | |
(8) | Prior period numbers have been restated to include preference share dividends as a deduction from operating profit. |
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Statements of Financial Performance | 97 | |||
Statements of Financial Position | 98 | |||
Statements of Changes in Shareholders’ Equity | 99 | |||
Statements of Cash Flows | 100 | |||
Notes to the Financial Statements | 101 | |||
1. Summary of Significant Accounting Policies | 101 | |||
2. Operating Profit | 114 | |||
3. Revenue from Ordinary Activities | 116 | |||
4. Average Balances and Related Interest | 117 | |||
5. Income Tax Expense | 122 | |||
6. Dividends | 124 | |||
7. Earnings Per Share | 125 | |||
8. Cash and Liquid Assets | 125 | |||
9. Receivables from Other Financial Institutions | 125 | |||
10. Trading Securities | 126 | |||
11. Investment Securities | 127 | |||
12. Loans, Advances and Other Receivables | 130 | |||
13. Provisions for Impairment | 133 | |||
14. Credit Risk Management | 137 | |||
15. Asset Quality | 144 | |||
16. Insurance Investment Assets | 149 | |||
17. Deposits with Regulatory Authorities | 149 | |||
18. Shares in and Loans to Controlled Entities | 149 | |||
19. Property, Plant and Equipment | 150 | |||
20. Intangible Assets | 152 | |||
21. Other Assets | 153 | |||
22. Deposits and Other Public Borrowings | 154 | |||
23. Payables to Other Financial Institutions | 155 | |||
24. Income Tax Liability | 155 | |||
25. Other Provisions | 156 | |||
26. Debt Issues | 157 | |||
27. Bills Payable and Other Liabilities | 159 | |||
28. Loan Capital | 160 | |||
29. Share Capital | 162 | |||
30. Outside Equity Interests | 168 | |||
31. Capital Adequacy | 169 | |||
32. Maturity Analysis of Monetary Assets and Liabilities | 173 | |||
33. Financial Reporting by Segments | 175 | |||
34. Life Insurance Business | 179 | |||
35. Remuneration of Auditors | 185 | |||
36. Commitments for Capital Expenditures Not Provided for in the Accounts | 185 | |||
37. Lease Commitments — Property, Plant and Equipment | 185 | |||
38. Contingent Liabilities and Assets | 186 | |||
39. Market Risk | 188 | |||
40. Superannuation Commitments | 198 | |||
41. Controlled Entities | 199 | |||
42. Investments in Associated Entities and Joint Ventures | 202 | |||
43. Standby Arrangements and Unused Credit Facilities | 202 | |||
44. Director and Executive Disclosures | 203 | |||
45. Related Party Disclosures | 203 | |||
46. Statements of Cash Flows | 204 | |||
47. Disclosures about Fair Value of Financial Instruments | 206 | |||
48. Differences between Australian and United States Accounting Principles | 208 |
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for the year ended 30 June 2005
GROUP | BANK | |||||||||||||||||||||||
2005 | 2004 | 2003 | 2005 | 2004 | ||||||||||||||||||||
Note | $M | $M | $M | $M | $M | |||||||||||||||||||
Interest income | 2 | 16,194 | 13,287 | 11,528 | 13,404 | 11,053 | ||||||||||||||||||
Interest expense | 2 | 10,228 | 7,877 | 6,502 | 8,601 | 6,649 | ||||||||||||||||||
Net interest income | 5,966 | 5,410 | 5,026 | 4,803 | 4,404 | |||||||||||||||||||
Other income: | ||||||||||||||||||||||||
Revenue from sale of assets | 595 | 943 | 128 | 474 | 1,398 | |||||||||||||||||||
Written down value of assets sold | (604 | ) | (874 | ) | (106 | ) | (439 | ) | (1,823 | ) | ||||||||||||||
Other | 2,924 | 2,777 | 2,605 | 3,988 | 3,737 | |||||||||||||||||||
Net banking operating income | 8,881 | 8,256 | 7,653 | 8,826 | 7,716 | |||||||||||||||||||
Funds management income including premiums | 3 | 1,261 | 1,175 | 1,149 | — | — | ||||||||||||||||||
Investment revenue | 3 | 2,008 | 1,967 | 8 | — | — | ||||||||||||||||||
Claims and policyholder liability expense | (1,871 | ) | (1,809 | ) | (91 | ) | — | — | ||||||||||||||||
Net funds management operating income | 1,398 | 1,333 | 1,066 | — | — | |||||||||||||||||||
Insurance premiums and related revenue | 3 | 1,132 | 1,012 | 1,131 | — | — | ||||||||||||||||||
Insurance Investment revenue | 3 | 1,186 | 840 | 620 | — | — | ||||||||||||||||||
Claims and policyholder liability expense | (1,243 | ) | (950 | ) | (1,071 | ) | — | — | ||||||||||||||||
Insurance margin on services operating income | 1,075 | 902 | 680 | — | — | |||||||||||||||||||
Total net operating income before appraisal value uplift/(reduction) | 11,354 | 10,491 | 9,399 | 8,826 | 7,716 | |||||||||||||||||||
Charge for bad and doubtful debts | 2,13 | 322 | 276 | 305 | 292 | 263 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Comparable business | 2 | 5,697 | 5,500 | 5,312 | 4,357 | 4,226 | ||||||||||||||||||
Which new Bank(1) | 2 | 150 | 749 | 239 | 150 | 725 | ||||||||||||||||||
5,847 | 6,249 | 5,551 | 4,507 | 4,951 | ||||||||||||||||||||
Appraisal value uplift/(reduction) | 34 | 778 | 201 | (245 | ) | — | — | |||||||||||||||||
Goodwill amortisation | (325 | ) | (324 | ) | (322 | ) | (186 | ) | (186 | ) | ||||||||||||||
Profit from ordinary activities before income tax | 5,638 | 3,843 | 2,976 | 3,841 | 2,316 | |||||||||||||||||||
Income tax expense | 5 | 1,637 | 1,262 | 958 | 920 | 669 | ||||||||||||||||||
Profit from ordinary activities after income tax | 4,001 | 2,581 | 2,018 | 2,921 | 1,647 | |||||||||||||||||||
Outside equity interests in net profit | (10 | ) | (9 | ) | (6 | ) | — | — | ||||||||||||||||
Net profit attributable to members of the Bank | 3,991 | 2,572 | 2,012 | 2,921 | 1,647 | |||||||||||||||||||
Foreign currency translation adjustment | (141 | ) | (8 | ) | (129 | ) | (2 | ) | 10 | |||||||||||||||
Revaluation of properties | 33 | 54 | 3 | 33 | 43 | |||||||||||||||||||
Total valuation adjustments | (108 | ) | 46 | (126 | ) | 31 | 53 | |||||||||||||||||
Total changes in equity other than those resulting from transactions with owners as owners | 3,883 | 2,618 | 1,886 | 2,952 | 1,700 | |||||||||||||||||||
Cents per share | ||||||||||||||||
Earnings per share based on net profit distributable to members of the Bank | ||||||||||||||||
Basic | 7 | 303.1 | 196.9 | 157.4 | ||||||||||||
Fully Diluted | 7 | 303.0 | 196.8 | 157.3 | ||||||||||||
Dividends per share attributable to shareholders of the Bank: | ||||||||||||||||
Ordinary shares | 6 | 197 | 183 | 154 | ||||||||||||
Preference shares (issued 6 April 2001) | 6 | 1,115 | 1,065 | 1,019 | ||||||||||||
Other equity instruments (issued 6 August 2003) | 7,795 | 7,306 | — | |||||||||||||
Other equity instruments (issued 6 January 2004) | 908 | 402 | — |
$M | $M | $M | ||||||||||
Net Profit after Income Tax comprises: | ||||||||||||
Net Profit after income tax (“underlying basis”) | 3,466 | 3,078 | 2,674 | |||||||||
Shareholders investment returns | 177 | 152 | 73 | |||||||||
Which new Bank(1) | (105 | ) | (535 | ) | (168 | ) | ||||||
Net Profit after Income Tax (“cash basis”) | 3,538 | 2,695 | 2,579 | |||||||||
Appraisal value uplift/(reduction) | 778 | 201 | (245 | ) | ||||||||
Goodwill amortisation | (325 | ) | (324 | ) | (322 | ) | ||||||
Net Profit after Income Tax (“statutory basis”) | 3,991 | 2,572 | 2,012 | |||||||||
(3) | June 2005 and 2004 results reflects the Which new Bank program, while prior year includes other strategic initiatives undertaken . |
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as at 30 June 2005
GROUP | BANK | |||||||||||||||||||
Note | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||
$M | $M | $M | $M | |||||||||||||||||
Assets | ||||||||||||||||||||
Cash and liquid assets | 8 | 5,715 | 6,453 | 5,574 | 6,485 | |||||||||||||||
Receivables due from other financial institutions | 9 | 6,205 | 8,369 | 6,133 | 7,068 | |||||||||||||||
Trading securities | 10 | 14,628 | 14,896 | 12,432 | 12,877 | |||||||||||||||
Investment securities | 11 | 10,272 | 11,447 | 6,922 | 6,626 | |||||||||||||||
Loans, advances and other receivables | 12 | 217,516 | 189,391 | 174,140 | 154,139 | |||||||||||||||
Bank acceptances of customers | 16,786 | 15,019 | 16,917 | 15,160 | ||||||||||||||||
Life insurance investment assets | 16 | 27,837 | 28,942 | — | — | |||||||||||||||
Deposits with regulatory authorities | 17 | 45 | 38 | 1 | 4 | |||||||||||||||
Shares in and loans to controlled entities | 18 | — | — | 29,161 | 23,677 | |||||||||||||||
Property, plant and equipment | 19 | 1,344 | 1,204 | 796 | 722 | |||||||||||||||
Investment in associates | 42 | 52 | 239 | 12 | 220 | |||||||||||||||
Intangible assets | 20 | 4,394 | 4,705 | 2,336 | 2,522 | |||||||||||||||
Other assets | 21 | 24,241 | 25,292 | 17,200 | 18,849 | |||||||||||||||
Total Assets | 329,035 | 305,995 | 271,624 | 248,349 | ||||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits and other public borrowings | 22 | 168,029 | 163,177 | 143,858 | 142,469 | |||||||||||||||
Payables due to other financial institutions | 23 | 8,023 | 6,641 | 7,969 | 6,611 | |||||||||||||||
Bank acceptances | 16,786 | 15,019 | 16,917 | 15,160 | ||||||||||||||||
Due to controlled entities | — | — | 16,652 | 14,176 | ||||||||||||||||
Provision for dividend | 6 | 14 | 14 | 14 | 13 | |||||||||||||||
Income tax liability | 24 | 1,550 | 811 | 1,421 | 690 | |||||||||||||||
Other provisions | 25 | 881 | 997 | 709 | 819 | |||||||||||||||
Life insurance policyholder liabilities | 34 | 24,694 | 24,638 | — | — | |||||||||||||||
Debt issues | 26 | 58,621 | 44,042 | 40,687 | 24,449 | |||||||||||||||
Bills payable and other liabilities | 27 | 18,086 | 19,140 | 16,658 | 17,888 | |||||||||||||||
296,684 | 274,479 | 244,885 | 222,275 | |||||||||||||||||
Loan Capital | 28 | 6,291 | 6,631 | 7,010 | 7,338 | |||||||||||||||
Total Liabilities | 302,975 | 281,110 | 251,895 | 229,613 | ||||||||||||||||
Net Assets | 26,060 | 24,885 | 19,729 | 18,736 | ||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||
Share capital: | ||||||||||||||||||||
Ordinary share capital | 29 | 13,871 | 13,359 | 13,871 | 13,359 | |||||||||||||||
Preference share capital | 29 | 687 | 687 | 687 | 687 | |||||||||||||||
Other equity instruments | 29 | 1,573 | 1,573 | 737 | 737 | |||||||||||||||
Reserves | 4,624 | 3,946 | 2,179 | 2,148 | ||||||||||||||||
Retained profits | 3,516 | 2,840 | 2,255 | 1,805 | ||||||||||||||||
Shareholders’ equity attributable to members of the Bank | 24,271 | 22,405 | 19,729 | 18,736 | ||||||||||||||||
Outside equity interests: | ||||||||||||||||||||
Controlled entities | 30 | 631 | 304 | — | — | |||||||||||||||
Life insurance statutory funds and other funds | 30 | 1,158 | 2,176 | — | — | |||||||||||||||
Total outside equity interests | 1,789 | 2,480 | — | — | ||||||||||||||||
Total Shareholders’ Equity | 26,060 | 24,885 | 19,729 | 18,736 | ||||||||||||||||
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GROUP | BANK | ||||||||||||||||||||||||
2005 | 2004 | 2003 | 2005 | 2004 | |||||||||||||||||||||
Note | $M | $M | $M | $M | $M | ||||||||||||||||||||
Ordinary Share Capital | 29 | ||||||||||||||||||||||||
Opening balance | 13,359 | 12,678 | 12,665 | 13,359 | 12,678 | ||||||||||||||||||||
Buy back | — | (213 | ) | — | — | (213 | ) | ||||||||||||||||||
Buy back for dividend reinvestment plan | — | — | (361 | ) | — | — | |||||||||||||||||||
Dividend reinvestment plan | 446 | 389 | 361 | 446 | 389 | ||||||||||||||||||||
Employee share ownership schemes | 66 | 38 | 13 | 66 | 38 | ||||||||||||||||||||
Share purchase plan | — | 467 | — | — | 467 | ||||||||||||||||||||
Closing balance | 13,871 | 13,359 | 12,678 | 13,871 | 13,359 | ||||||||||||||||||||
Preference Share Capital | 29 | ||||||||||||||||||||||||
Opening balance | 687 | 687 | 687 | 687 | 687 | ||||||||||||||||||||
Closing balance | 687 | 687 | 687 | 687 | 687 | ||||||||||||||||||||
Other Equity Instruments | 29 | ||||||||||||||||||||||||
Opening balance | 1,573 | — | — | 737 | — | ||||||||||||||||||||
Issue of instruments | — | 1,573 | — | — | 737 | ||||||||||||||||||||
Closing balance | 1,573 | 1,573 | — | 737 | 737 | ||||||||||||||||||||
Retained profits | |||||||||||||||||||||||||
Opening balance | 2,840 | 2,809 | 1,452 | 1,805 | 2,591 | ||||||||||||||||||||
Reversal of provision for final dividend at 30 June 2002 (on adoption of AASB 1044) | — | — | 1,027 | — | — | ||||||||||||||||||||
Share buy back | — | (319 | ) | — | — | (319 | ) | ||||||||||||||||||
Transfers from reserves | — | 142 | 250 | — | — | ||||||||||||||||||||
Operating profit attributable to members of Bank | 3,991 | 2,572 | 2,012 | 2,921 | 1,647 | ||||||||||||||||||||
Total available for appropriation | 6,831 | 5,204 | 4,741 | 4,726 | 3,919 | ||||||||||||||||||||
Transfers to reserves | (786 | ) | (201 | ) | — | — | — | ||||||||||||||||||
Interim dividend — cash component | (883 | ) | (808 | ) | (699 | ) | (883 | ) | (808 | ) | |||||||||||||||
Interim dividend — dividend reinvestment plan | (200 | ) | (188 | ) | (166 | ) | (200 | ) | (188 | ) | |||||||||||||||
Payment of final dividend — cash component | (1,069 | ) | (865 | ) | (832 | ) | (1,069 | ) | (865 | ) | |||||||||||||||
Payment of final dividend — dividend reinvestment plan | (246 | ) | (201 | ) | (195 | ) | (246 | ) | (201 | ) | |||||||||||||||
Other dividends | (131 | ) | (101 | ) | (40 | ) | (73 | ) | (52 | ) | |||||||||||||||
Closing balance | 3,516 | 2,840 | 2,809 | 2,255 | 1,805 | ||||||||||||||||||||
Reserves | |||||||||||||||||||||||||
General Reserve | |||||||||||||||||||||||||
Opening balance | 3,810 | 3,751 | 3,998 | 570 | 570 | ||||||||||||||||||||
Appropriation from profits | 786 | 201 | — | — | — | ||||||||||||||||||||
Transfer to retained profits | — | (142 | ) | (247 | ) | — | — | ||||||||||||||||||
Closing balance | 4,596 | 3,810 | 3,751 | 570 | 570 | ||||||||||||||||||||
Capital Reserve | |||||||||||||||||||||||||
Opening balance | 280 | 289 | 289 | 1,531 | 1,531 | ||||||||||||||||||||
Reversal of revaluation surplus / (deficit) on sale of property | 2 | (9 | ) | — | 2 | — | |||||||||||||||||||
Closing balance | 282 | 280 | 289 | 1,533 | 1,531 | ||||||||||||||||||||
Asset Revaluation Reserve | |||||||||||||||||||||||||
Opening balance | 61 | 7 | 4 | 43 | — | ||||||||||||||||||||
Revaluation of investments and properties | 33 | 45 | 3 | 33 | 43 | ||||||||||||||||||||
Transfers on sale of properties | (2 | ) | 9 | — | (2 | ) | — | ||||||||||||||||||
Closing balance | 92 | 61 | 7 | 74 | 43 | ||||||||||||||||||||
Foreign Currency Translation Reserve | |||||||||||||||||||||||||
Opening balance | (205 | ) | (197 | ) | (65 | ) | 4 | (6 | ) | ||||||||||||||||
Currency translation adjustments | (141 | ) | (8 | ) | (129 | ) | (2 | ) | 10 | ||||||||||||||||
Transfer to retained profits | — | — | (3 | ) | — | — | |||||||||||||||||||
Closing balance | (346 | ) | (205 | ) | (197 | ) | 2 | 4 | |||||||||||||||||
Total Reserves | 4,624 | 3,946 | 3,850 | 2,179 | 2,148 | ||||||||||||||||||||
Shareholder’s Equity Attributable to Members of the Bank | 24,271 | 22,405 | 20,024 | 19,729 | 18,736 | ||||||||||||||||||||
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GROUP | BANK | |||||||||||||||||||||||
2005 | 2004 | 2003 | 2005 | 2004 | ||||||||||||||||||||
Note | $M | $M | $M | $M | $M | |||||||||||||||||||
Cash Flows From Operating Activities | ||||||||||||||||||||||||
Interest received | 16,205 | 13,101 | 11,452 | 13,148 | 11,045 | |||||||||||||||||||
Dividends received | 3 | 6 | 4 | 988 | 798 | |||||||||||||||||||
Interest paid | (10,198 | ) | (7,543 | ) | (6,455 | ) | (8,515 | ) | (6,351 | ) | ||||||||||||||
Other operating income received | 4,649 | 3,410 | 3,135 | 3,615 | 2,375 | |||||||||||||||||||
Expenses paid | (5,714 | ) | (5,529 | ) | (5,438 | ) | (4,475 | ) | (4,459 | ) | ||||||||||||||
Income taxes paid | (985 | ) | (1,366 | ) | (1,258 | ) | (619 | ) | (886 | ) | ||||||||||||||
Net decrease/(increase) in trading securities | 318 | (4,324 | ) | (2,484 | ) | 505 | (4,672 | ) | ||||||||||||||||
Life insurance: | ||||||||||||||||||||||||
Investment income | 1,572 | 841 | 644 | — | — | |||||||||||||||||||
Premiums received (1) | 3,183 | 3,562 | 4,130 | — | — | |||||||||||||||||||
Policy payments(1) | (4,664 | ) | (4,529 | ) | (5,855 | ) | — | — | ||||||||||||||||
Net Cash provided by / (used in) operating activities | 46 | (c) | 4,369 | (2,371 | ) | (2,125 | ) | 4,647 | (2,150 | ) | ||||||||||||||
Cash Flows from Investing Activities | ||||||||||||||||||||||||
Payments for shares in controlled entities, other companies and management rights | (82 | ) | — | (173 | ) | (24 | ) | — | ||||||||||||||||
Proceeds from disposal of controlled entities | 46 | (f) | — | 63 | 33 | — | 885 | |||||||||||||||||
Proceeds from disposal of entities and businesses | 173 | — | — | 178 | — | |||||||||||||||||||
Redemption of capital from controlled entities | — | — | — | 306 | — | |||||||||||||||||||
Disposal of shares in other companies | — | 114 | — | — | 114 | |||||||||||||||||||
Net movement in investment securities: | ||||||||||||||||||||||||
Purchases | (22,608 | ) | (25,587 | ) | (18,055 | ) | (20,254 | ) | (15,157 | ) | ||||||||||||||
Proceeds from sale | 392 | 697 | 23 | 275 | 390 | |||||||||||||||||||
Proceeds at or close to maturity | 22,799 | 24,407 | 17,719 | 19,344 | 14,904 | |||||||||||||||||||
(Lodgement)/withdrawal of deposits with regulatory authorities | (7 | ) | (15 | ) | 66 | 3 | (2 | ) | ||||||||||||||||
Net increase in loans, advances and other receivables | (28,447 | ) | (29,328 | ) | (13,577 | ) | (20,293 | ) | (22,873 | ) | ||||||||||||||
Net amounts paid to controlled entities | — | — | — | (3,325 | ) | 1,412 | ||||||||||||||||||
Proceeds from sale of property, plant and equipment | 30 | 69 | 72 | 30 | 7 | |||||||||||||||||||
Purchase of property, plant and equipment | (286 | ) | (536 | ) | (143 | ) | (164 | ) | (175 | ) | ||||||||||||||
Net decrease/(increase) in receivables due from other financial institutions not at call | 933 | 292 | 513 | 441 | (344 | ) | ||||||||||||||||||
Net decrease/(increase) in securities purchased under agreements to resell | 991 | (1,023 | ) | 50 | 988 | (1,039 | ) | |||||||||||||||||
Net decrease/(increase) in other assets | 1,056 | (1,461 | ) | 301 | 758 | (1,537 | ) | |||||||||||||||||
Life insurance: | ||||||||||||||||||||||||
Purchases of investment securities | (14,165 | ) | (20,286 | ) | (13,091 | ) | — | — | ||||||||||||||||
Proceeds from sale/maturity of investment securities | 15,281 | 21,500 | 14,628 | — | — | |||||||||||||||||||
Net Cash (used in) Investing Activities | (23,940 | ) | (31,094 | ) | (11,634 | ) | (21,737 | ) | (23,415 | ) | ||||||||||||||
Cash Flows from Financing Activities | ||||||||||||||||||||||||
Buy back of shares | — | (532 | ) | — | — | (532 | ) | |||||||||||||||||
Proceeds from issue of shares (net of costs) | 66 | 505 | 13 | 66 | 505 | |||||||||||||||||||
Proceeds from issue of preference shares to outside equity interests | 323 | — | 182 | — | — | |||||||||||||||||||
Proceeds from issue of other equity instruments (net of costs) | — | 1,573 | — | — | 737 | |||||||||||||||||||
Net increase in deposits and other borrowings | 6,332 | 21,997 | 5,129 | 2,807 | 19,254 | |||||||||||||||||||
Net movement in debt issues | 14,579 | 13,413 | 7,054 | 16,238 | 7,765 | |||||||||||||||||||
Dividends paid (excluding DRP) | (2,083 | ) | (1,774 | ) | (1,933 | ) | (2,024 | ) | (1,726 | ) | ||||||||||||||
Net movements in other liabilities | (330 | ) | (242 | ) | (926 | ) | (292 | ) | 113 | |||||||||||||||
Net increase/(decrease) in payables due to other financial institutions not at call | 449 | (929 | ) | (796 | ) | 449 | (909 | ) | ||||||||||||||||
Net increase/(decrease) in securities sold under agreements to repurchase | (1,480 | ) | 206 | 3,046 | (1,418 | ) | 269 | |||||||||||||||||
Issue of loan capital | 1,233 | 985 | 901 | 1,554 | 1,784 | |||||||||||||||||||
Redemptions of loan capital | (1,392 | ) | (317 | ) | — | (1,621 | ) | (317 | ) | |||||||||||||||
Other | (37 | ) | (2 | ) | 19 | 6 | (16 | ) | ||||||||||||||||
Net Cash provided by Financing Activities | 17,660 | 34,883 | 12,689 | 15,765 | 26,927 | |||||||||||||||||||
Net (decrease)/increase in Cash and Cash Equivalents | (1,911 | ) | 1,418 | (1,070 | ) | (1,325 | ) | 1,362 | ||||||||||||||||
Cash and Cash Equivalents at beginning of period | 2,846 | 1,428 | 2,498 | 1,639 | 277 | |||||||||||||||||||
Cash and Cash Equivalents at end of period | 46 | (a) | 935 | 2,846 | 1,428 | 314 | 1,639 | |||||||||||||||||
(1) | These were gross premiums and policy payments before splitting between policyholder liabilities and revenue and expense. |
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NOTE 1 Summary of Significant Accounting Policies
101
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NOTE 1 Summary of Significant Accounting Policies continued
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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 | Lesser of unexpired lease term or lives as above | |
Equipment | ||
- Security surveillance systems | 10 years | |
- Furniture | 8 years | |
- Office machinery | 5 years | |
- EFTPOS machines | 3 years |
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NOTE 1 Summary of Significant Accounting Policies continued
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NOTE 1 Summary of Significant Accounting Policies continued
(i) | All assets, liabilities, revenues, expenses and equity are included in the financial report irrespective of whether they are designated as relating to policyholders or to shareholders. |
(ii) | All assets are measured at net market values. |
(iii) | All liabilities are measured at net present values. Policy liabilities are calculated in accordance with the principles of Margin on Services (MoS) profit reporting as set out in Actuarial Standard AS 1.03: Valuation of Policy Liabilities issued by the Life Insurance Actuarial Standards Board. Other Liabilities are measured at net present value at reporting date. |
(iv) | Any life insurers within the Group that are parent entities recognise and disclose any excess or deficiency of the net market values of interests in subsidiaries over the net assets of those subsidiaries as an item in the financial report of the life insurer economic entity. |
(v) | Premiums and claims are separated on a product basis into their revenue, expense and change in liability components unless the separation is not practicable or the components cannot be reliably measured. |
(vi) | Returns on all investments controlled by a life insurer entity in the Group are recognised as revenues. |
(vii) | Participating benefits vested in relation to the financial year, other than transfers from unvested policyholder benefits liabilities, are recognised as expenses. |
(viii) | Reinsurance contracts entered into are recognised on a gross basis. |
(i) | Investment linked business | |
Premiums received, which are in the nature of investment deposits, have the fee portion of the premium recognised as revenue and the deposit portion recognised as an increase in policy liabilities. Premiums with no due date are recognised on a cash received basis. Fees earned by the Shareholder for managing the funds invested are recognised as revenue. Claims under investment linked businesses represent withdrawals of investment deposits and are recognised as a reduction in policy liabilities. |
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NOTE 1 Summary of Significant Accounting Policies continued
(ii) | Non-investment linked business Premiums received for providing services and bearing risks are recognised as revenue. Premiums with a regular due date are recognised as revenue on an accruals basis. Non-investment linked claims are recognised as an expense when a liability has been established |
— | Valuation of the investment in the life insurance controlled entities is based on the appraisal value. The appraisal value comprises the present value of future profits from in force business, the estimated value of profits from future business and the shareholders interest in the net worth of the life insurance Statutory and Shareholder Funds. | |
— | Non life insurance controlled entities are valued using a discounted cash flow method applied to anticipated future income streams, allowing for assumptions about future sales growth, redemptions, expenses, investment returns and fee margins. This method allows the values so calculated to be expressed in the form of appraisal values, consistent with those calculated for the life insurance controlled entities. Valuation of the investment in the non life insurance controlled entities is then based on these calculated appraisal values as at reporting date. | |
— | Properties are valued annually by qualified independent valuers. |
(i) | Emergence of planned profit margins: | |
In setting premium rates, life insurers will include planned margins of revenues over expenses. When the life insurer has performed the services necessary to establish a valid claim to those margins and has received the revenues relating to those services, the planned margins are recognised in profit. Where actual experience replicates planned margin assumptions, the planned profit margin will be released over the life of the policy. |
(ii) | Difference between actual and planned experience: | |
Experience profits/(losses) are realised where actual experience differs from the expected performance used to determine planned margins. Circumstances giving rise to experience profits/(losses) include experience variations in claims, expenses, mortality, discontinuance and investment returns. For example, an experience profit will emerge when the expenses of maintaining all in force business in a year are lower than those allowed for in the planned margin. |
(iii) | Loss recognition on groups of related products or reversals of previously recognised losses: | |
Where future expenses for a group of related products exceeds future revenues, the anticipated loss is recognised immediately. If unprofitable business becomes profitable, previously recognised losses are reversed immediately. |
(iv) | Investment earnings on assets in excess of policy liabilities: Investment assets are held in excess of those required to meet policy liabilities. Investment earnings are directly influenced by market conditions and as such this component of profit will vary from year to year. |
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NOTE 1 Summary of Significant Accounting Policies continued
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NOTE 1 Summary of Significant Accounting Policies continued
Group $M | ||||
1 July 2004 net plan surplus | 389 | |||
Accounting expense | (52 | ) | ||
Net actuarial gains and other movements — to Retained Earnings | 110 | |||
30 June 2005 net plan surplus | 447 | |||
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NOTE 1 Summary of Significant Accounting Policies continued
— | an adjustment to Retained Earnings of $313 million to reflect both the initial recognition of embedded derivatives and non-hedged derivatives at fair value, and also the cumulative cash flow and fair value hedge ineffectiveness inherent within the entire 1 July 2005 hedge accounting portfolio; and | |
— | the recognition of a Cash Flow Hedge Reserve of $40 million representing the cumulative hedge effectiveness of all 1 July 2005 cash flow hedge relationships. |
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Consolidated Group | ||||||
TOTAL SHAREHOLDERS’ | ||||||
EQUITY | ||||||
Shareholders’ Equity Reconciliation | Reference | $M | ||||
Australian GAAP Total as at 1 July 2004 | 24,885 | |||||
AIFRS 1 July 2004 After Tax Adjustments to Shareholders’ Equity | ||||||
Retained Earnings Impacts: | ||||||
Initial recognition of defined benefit superannuation plan in surplus | (i) | 443 | ||||
Initial recognition of defined benefit superannuation plan in deficit | (i) | (54 | ) | |||
Net adjustment in respect of share based payment compensation | (ii) | 141 | ||||
Reversal of market value appreciation on treasury shares held within the Bank’s life insurance statutory funds | (iv) | (46 | ) | |||
Transfer of historic write-downs of acquired goodwill within the appraisal value of the life insurance and funds management businesses | (iv) | (287 | ) | |||
Transfer from Foreign Currency Translation Reserve | (vi) | (205 | ) | |||
Change in the revenue recognition pattern for ‘net of tax’ leveraged leases | 17 | |||||
Share Capital Impacts: | ||||||
Initial recognition of treasury shares held within employee share scheme trust | (ii) | (126 | ) | |||
Initial recognition of treasury shares held within the Bank’s life insurance statutory funds | (iv) | (245 | ) | |||
General Reserve: | ||||||
Net write down of internally generated appraisal value of the life insurance and funds management businesses | (iv) | (2,836 | ) | |||
Other Reserves: | ||||||
Transfer from the Foreign Currency Translation Reserve to Retained Earnings | (vi) | 205 | ||||
Increase in Asset Revaluation Reserve following change in valuation methodology for owner-occupied property | 32 | |||||
Initial recognition of Equity Compensation Reserve | (ii) | 47 | ||||
AIFRS restated Shareholders’ Equity as at 1 July 2004 | 21,971 | |||||
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Group | Group | Bank | Bank | |||||||||||||||
Reference | $M | $M | $M | $M | ||||||||||||||
Australian GAAP Statutory Profit After Tax for year ended 30 June 2005 | 3,991 | 2,921 | ||||||||||||||||
Recognition of non-cash pension expense related to defined benefit superannuation plans | (i) | (52 | ) | (52 | ) | |||||||||||||
Recognition of amortisation expense related to treasury shares held within the employee share scheme trust | (ii) | (30 | ) | (31 | ) | |||||||||||||
Reversal of realised and unrealised gains and dividend income accrued on treasury shares held within the Bank’s life insurance statutory funds | (iv) | (39 | ) | — | ||||||||||||||
Reversal of goodwill expense net of separately identifiable intangible asset amortisation | (v) | 321 | 186 | |||||||||||||||
Change in the revenue recognition pattern for ‘net of tax’ leveraged leases | (9 | ) | (9 | ) | ||||||||||||||
Total AIFRS after tax adjustment to distributable earnings for the year ended 30 June 2005 | 191 | 94 | ||||||||||||||||
Reversal of internally generated appraisal value uplift in the life insurance and funds management businesses | (iv) | (778 | ) | — | ||||||||||||||
Total AIFRS after tax adjustment to Statutory Profit for the year ended 30 June 2005 | (587 | ) | 94 | |||||||||||||||
Restated AIFRS after tax Statutory Profit for the year ended 30 June 2005 | 3,404 | 3,015 | ||||||||||||||||
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Consolidated Group | ||||||
TOTAL SHAREHOLDERS’ | ||||||
EQUITY | ||||||
Shareholders’ Equity Reconciliation | Reference | $M | ||||
AIFRS restated Shareholders’ Equity as at 1 July 2004 | 21,971 | |||||
Australian GAAP after tax Statutory Profit for the year ended 30 June 2005 | 3,991 | |||||
Total AIFRS after tax adjustment to Statutory Profit for the year ended 30 June 2005 per Table 2 | (587 | ) | ||||
Other current Australian GAAP Reserve Movements for the year ended 30 June 2005 | (2,816) | (1) | ||||
IFRS 1 July 2005 After Tax Adjustments to Shareholders’ Equity | ||||||
Retained Earnings Impacts: | ||||||
Actuarial and other movements within the defined benefit superannuation plan in surplus | (i) | 108 | ||||
Actuarial and other movements within the defined benefit superannuation plan in deficit | (i) | 2 | ||||
Net movement in the calculation of life insurance policyholder liabilities due to actuarial methodology changes and the write off of deferred acquisition cost asset on products reclassified from insurance contracts to investment contracts | (xii) | (248 | ) | |||
Adjustment in respect of realised gains and dividend income on treasury shares held within the Bank’s life insurance statutory funds | (iv) | 19 | ||||
Deferral of initial entry fee income earned by life insurance entities | (xii) | (75 | ) | |||
Adjustment to fair value calculation for assets held by life insurance business | (14 | ) | ||||
Adjustment in respect of derivative financial instruments on initial application of hedge accounting and recognition of embedded derivatives | (viii) | (313 | ) | |||
Deferral of previously recognised net income and expenses within banking business | (xi) | (61 | ) | |||
Foreign exchange adjustment on the reclassification of hybrid financial instruments from equity to liabilities | (x) | 22 | ||||
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 | (xiii) | (3 | ) | |||
Share Capital Impacts: | ||||||
Net movement in treasury shares held within employee share scheme trust | (ii) | (6 | ) | |||
Net movement in treasury shares held within the Bank’s life insurance statutory funds | (iv) | (8 | ) | |||
Other Reserves and Capital Movements: | ||||||
Asset Revaluation Reserve adjustment for change in valuation methodology for owner-occupied property | (4 | ) | ||||
Reclassification of outside equity interest in the life insurance statutory funds and other funds as liabilities | (xii) | (1,158 | ) | |||
Initial recognition of Cash Flow Hedge Reserve on initial application of hedge accounting | (viii) | 40 | ||||
Reclassification of hybrid financial instruments from equity to liabilities | (x) | (2,260 | ) | |||
Foreign currency translation reserve adjustment due to reclassification of hybrid financial instruments from equity to liabilities at exchange rates at 30 June 2005 | (x) | 79 | ||||
Reclassification and revaluation of Australian GAAP investment securities at cost to available-for-sale financial assets at fair value | (xiii) | 68 | ||||
Net movement in Equity Compensation Reserve | (ii) | (24 | ) | |||
AIFRS Restated Shareholders’ Equity as at 1 July 2005 | 18,723 | |||||
(1) | Represents movements in Shareholders’ Equity other than profit for the year: |
$M | ||||
Change in Ordinary Shareholders’ Equity | 512 | |||
Change in Reserves | 678 | |||
Change in Outside Equity Interests: | ||||
Controlled entities | 327 | |||
Insurance statutory funds | (1,018 | ) | ||
Change in Retained Earnings | 676 | |||
Less: Net profit after tax (“statutory basis”) | (3,991 | ) | ||
Net adjustment | (2,816 | ) | ||
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GROUP | BANK | |||||||||||||||||||
2005 | 2004 | 2003 | 2005 | 2004 | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
Interest Income | ||||||||||||||||||||
Loans | 14,244 | 11,675 | 10,126 | 11,428 | 9,504 | |||||||||||||||
Other financial institutions | 229 | 182 | 191 | 136 | 90 | |||||||||||||||
Cash and liquid assets | 198 | 198 | 150 | 221 | 214 | |||||||||||||||
Trading securities | 785 | 600 | 454 | 647 | 486 | |||||||||||||||
Investment securities | 723 | 607 | 566 | 242 | 229 | |||||||||||||||
Dividends on redeemable preference shares | 15 | 25 | 41 | 3 | 3 | |||||||||||||||
Controlled entities | — | — | — | 727 | 527 | |||||||||||||||
Total Interest Income | 16,194 | 13,287 | 11,528 | 13,404 | 11,053 | |||||||||||||||
Interest Expense | ||||||||||||||||||||
Deposits | 7,063 | 5,949 | 4,732 | 5,543 | 4,833 | |||||||||||||||
Other financial institutions | 257 | 160 | 198 | 255 | 159 | |||||||||||||||
Debt issues | 2,557 | 1,505 | 1,352 | 1,944 | 1,081 | |||||||||||||||
Controlled entities | — | — | — | 496 | 282 | |||||||||||||||
Loan capital | 351 | 263 | 220 | 363 | 294 | |||||||||||||||
Total Interest Expense | 10,228 | 7,877 | 6,502 | 8,601 | 6,649 | |||||||||||||||
Net Interest Income | 5,966 | 5,410 | 5,026 | 4,803 | 4,404 | |||||||||||||||
Other Operating Income | ||||||||||||||||||||
Lending fees | 753 | 724 | 652 | 730 | 702 | |||||||||||||||
Commission and other fees | 1,595 | 1,503 | 1,394 | 1,310 | 1,256 | |||||||||||||||
Trading income | ||||||||||||||||||||
Foreign exchange earnings | 167 | 228 | 200 | 137 | 203 | |||||||||||||||
Trading securities | 193 | 165 | 190 | 164 | 128 | |||||||||||||||
Other financial instruments (incl derivatives) | 80 | 106 | 112 | 80 | 106 | |||||||||||||||
Dividends — controlled entities | — | — | — | 988 | 794 | |||||||||||||||
— other | 3 | 6 | 4 | — | 4 | |||||||||||||||
Net (loss) gain on investments and loans | (13 | ) | 80 | (9 | ) | (39 | ) | (416 | ) | |||||||||||
Net profit (loss) on sale of property, plant and equipment | 4 | (11 | ) | 22 | 4 | (10 | ) | |||||||||||||
Funds management income | 1,398 | 1,333 | 1,066 | — | — | |||||||||||||||
Insurance income | 1,075 | 902 | 680 | — | — | |||||||||||||||
Other(1) | 133 | 45 | 62 | 649 | 545 | |||||||||||||||
Total Other Operating Income | 5,388 | 5,081 | 4,373 | 4,023 | 3,312 | |||||||||||||||
Total Net Operating Income before appraisal value uplift/(reduction) | 11,354 | 10,491 | 9,399 | 8,826 | 7,716 | |||||||||||||||
Charge for Bad and Doubtful Debts (Note 13) | ||||||||||||||||||||
General provisions | 322 | 276 | 305 | 292 | 263 | |||||||||||||||
Total Charge for Bad and Doubtful Debts | 322 | 276 | 305 | 292 | 263 | |||||||||||||||
(1) | Includes an equity accounted loss of $32 million for the year ended 30 June 2004. Principally relates to a change in revenue recognition accounting policy by the associate entity. |
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GROUP | BANK | |||||||||||||||||||
2005 | 2004 | 2003 | 2005 | 2004 | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
Staff Expenses | ||||||||||||||||||||
Salaries and wages | 2,274 | 2,152 | 2,106 | 1,758 | 1,683 | |||||||||||||||
Superannuation contributions | 7 | 8 | 13 | (18 | ) | (14 | ) | |||||||||||||
Provisions for employee entitlements | 67 | 41 | 11 | 59 | 34 | |||||||||||||||
Payroll tax | 115 | 115 | 107 | 101 | 101 | |||||||||||||||
Fringe benefits tax | 32 | 32 | 26 | 28 | 28 | |||||||||||||||
Other staff expenses | 104 | 100 | 120 | 29 | 46 | |||||||||||||||
Comparable business | 2,599 | 2,448 | 2,383 | 1,957 | 1,878 | |||||||||||||||
Initiatives including Which new Bank | 50 | 273 | 155 | 50 | 267 | |||||||||||||||
Total Staff Expenses (excluding share based compensation) | 2,649 | 2,721 | 2,538 | 2,007 | 2,145 | |||||||||||||||
Share Based Compensation | ||||||||||||||||||||
Comparable business | 44 | (1) | 105 | 94 | 44 | 104 | ||||||||||||||
Initiatives including Which new Bank | — | — | 25 | — | — | |||||||||||||||
Total Share Based Compensation | 44 | 105 | 119 | 44 | 104 | |||||||||||||||
Occupancy and Equipment Expenses | ||||||||||||||||||||
Operating lease rentals | 331 | 340 | 354 | 266 | 280 | |||||||||||||||
Depreciation | ||||||||||||||||||||
Buildings | 21 | 21 | 24 | 20 | 18 | |||||||||||||||
Leasehold improvements | 58 | 55 | 51 | 46 | 45 | |||||||||||||||
Equipment | 63 | 50 | 53 | 29 | 22 | |||||||||||||||
Operating lease fixed assets | 8 | — | — | — | — | |||||||||||||||
Repairs and maintenance | 71 | 68 | 58 | 64 | 61 | |||||||||||||||
Other | 61 | 47 | 69 | 40 | 28 | |||||||||||||||
Comparable business | 613 | 581 | 609 | 465 | 454 | |||||||||||||||
Initiatives including Which new Bank | 13 | 20 | 3 | 13 | 20 | |||||||||||||||
Total Occupancy and Equipment Expenses | 626 | 601 | 612 | 478 | 474 | |||||||||||||||
Information Technology Services | ||||||||||||||||||||
Projects and development | 322 | 281 | 194 | 298 | 247 | |||||||||||||||
Data processing | 248 | 238 | 255 | 221 | 214 | |||||||||||||||
Desktop | 150 | 159 | 178 | 148 | 157 | |||||||||||||||
Communications | 204 | 205 | 171 | 174 | 178 | |||||||||||||||
Software amortisation | 26 | 11 | 78 | 18 | 2 | |||||||||||||||
Information technology equipment-depreciation | 6 | 1 | 1 | 6 | 1 | |||||||||||||||
Comparable business | 956 | 895 | 877 | 865 | 799 | |||||||||||||||
Initiatives including Which new Bank | 52 | 292 | 30 | 52 | 274 | |||||||||||||||
Total Information Technology Services | 1,008 | 1,187 | 907 | 917 | 1,073 | |||||||||||||||
Other Expenses | ||||||||||||||||||||
Postage | 112 | 112 | 109 | 98 | 98 | |||||||||||||||
Stationery | 108 | 114 | 118 | 79 | 88 | |||||||||||||||
Fees and commissions | 628 | 598 | 551 | 402 | 369 | |||||||||||||||
Advertising, marketing and loyalty | 288 | 311 | 259 | 234 | 260 | |||||||||||||||
Other | 349 | 336 | 312 | 213 | 176 | |||||||||||||||
Comparable business | 1,485 | 1,471 | 1,349 | 1,026 | 991 | |||||||||||||||
Initiatives including Which new Bank | 35 | 164 | 26 | 35 | 164 | |||||||||||||||
Total Other Expenses | 1,520 | 1,635 | 1,375 | 1,061 | 1,155 | |||||||||||||||
Comparable business | 5,697 | 5,500 | 5,312 | 4,357 | 4,226 | |||||||||||||||
Initiatives including Which New Bank | 150 | 749 | 239 | 150 | 725 | |||||||||||||||
Total Operating Expenses before goodwill amortisation | 5,847 | 6,249 | 5,551 | 4,507 | 4,951 | |||||||||||||||
Appraisal value uplift/(reduction) | 778 | 201 | (245 | ) | — | — | ||||||||||||||
Goodwill amortisation | (325 | ) | (324 | ) | (322 | ) | (186 | ) | (186 | ) | ||||||||||
Profit from ordinary activities before income tax | 5,638 | 3,843 | 2,976 | 3,841 | 2,316 | |||||||||||||||
(2) | Reduction in share based compensation reflects the cessation of the mandatory component of the equity participation plan in February 2005, which is now paid in cash and included within salaries and wages (refer to Note 29). |
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GROUP | BANK | |||||||||||||||||||
2005 | 2004 | 2003 | 2005 | 2004 | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
Banking | ||||||||||||||||||||
Interest income | 16,194 | 13,287 | 11,528 | 13,404 | 11,053 | |||||||||||||||
Fees and commissions | 2,348 | 2,227 | 2,046 | 2,040 | 1,958 | |||||||||||||||
Trading income | 440 | 499 | 502 | 380 | 437 | |||||||||||||||
Dividends | 3 | 6 | 4 | 988 | 798 | |||||||||||||||
Proceeds from sale of property, plant and equipment | 30 | 69 | 72 | 26 | 9 | |||||||||||||||
Proceeds from sale of investments and loans | 565 | 874 | 56 | 448 | 1,398 | |||||||||||||||
Other income | 133 | 45 | 53 | 580 | 535 | |||||||||||||||
19,713 | 17,007 | 14,261 | 17,866 | 16,188 | ||||||||||||||||
Funds Management and Insurance | ||||||||||||||||||||
Funds management income including premiums | 1,261 | 1,175 | 1,149 | — | — | |||||||||||||||
Insurance premium and related income | 1,132 | 1,012 | 1,131 | — | — | |||||||||||||||
Investment income | 3,194 | 2,807 | 628 | — | — | |||||||||||||||
5,587 | 4,994 | 2,908 | — | — | ||||||||||||||||
Appraisal value uplift(1) | 778 | 201 | — | — | — | |||||||||||||||
Total revenue from ordinary activities | 26,078 | 22,202 | 17,169 | 17,866 | 16,188 | |||||||||||||||
(1) | Appraisal value reduction of $245 million for year ended 30 June 2003. |
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2005 | 2004 | 2003 | ||||||||||||||||||||||||||||||||||
Average | Average | Average | Average | Average | Average | |||||||||||||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||||||||||||
Full Year Ended | $M | $M | % | $M | $M | % | $M | $M | % | |||||||||||||||||||||||||||
Average Interest Earning Asset and Income | ||||||||||||||||||||||||||||||||||||
Cash and liquid assets | ||||||||||||||||||||||||||||||||||||
Australia | 3,716 | 178 | 4.8 | 4,027 | 181 | 4.5 | 3,293 | 133 | 4.0 | |||||||||||||||||||||||||||
Overseas | 1,077 | 20 | 1.9 | 868 | 17 | 2.0 | 813 | 17 | 2.1 | |||||||||||||||||||||||||||
Receivables due from other financial institutions | ||||||||||||||||||||||||||||||||||||
Australia | 2,228 | 61 | 2.7 | 3,382 | 32 | 0.9 | 2,446 | 37 | 1.5 | |||||||||||||||||||||||||||
Overseas | 3,748 | 168 | 4.5 | 3,776 | 150 | 4.0 | 3,734 | 154 | 4.1 | |||||||||||||||||||||||||||
Deposits with regulatory authorities | ||||||||||||||||||||||||||||||||||||
Australia | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Overseas | 43 | — | — | 62 | — | — | 56 | — | — | |||||||||||||||||||||||||||
Trading securities | ||||||||||||||||||||||||||||||||||||
Australia | 11,532 | 603 | 5.2 | 9,682 | 444 | 4.6 | 7,360 | 326 | 4.4 | |||||||||||||||||||||||||||
Overseas | 3,850 | 182 | 4.7 | 3,445 | 156 | 4.5 | 3,395 | 128 | 3.8 | |||||||||||||||||||||||||||
Investment securities | ||||||||||||||||||||||||||||||||||||
Australia | 3,802 | 296 | 7.8 | 4,411 | 298 | 6.8 | 4,240 | 261 | 6.2 | |||||||||||||||||||||||||||
Overseas | 8,538 | 427 | 5.0 | 8,440 | 310 | 3.7 | 8,062 | 305 | 3.8 | |||||||||||||||||||||||||||
Loans, advances and other receivables | ||||||||||||||||||||||||||||||||||||
Australia | 171,231 | 11,832 | 6.9 | 149,487 | 9,927 | 6.6 | 131,746 | 8,538 | 6.5 | |||||||||||||||||||||||||||
Overseas | 34,183 | 2,427 | 7.1 | 26,607 | 1,772 | 6.7 | 23,125 | 1,629 | 7.0 | |||||||||||||||||||||||||||
Other interest earning assets | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Intragroup loans | ||||||||||||||||||||||||||||||||||||
Australia | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Overseas | 5,793 | 92 | 1.6 | 4,102 | 17 | 0.4 | 3,604 | 31 | 0.9 | |||||||||||||||||||||||||||
Average interest earning assets and interest income including intragroup | 249,741 | 16,286 | 6.5 | 218,289 | 13,304 | 6.1 | 191,874 | 11,559 | 6.0 | |||||||||||||||||||||||||||
Intragroup eliminations | (5,793 | ) | (92 | ) | 1.6 | (4,102 | ) | (17 | ) | 0.4 | (3,604 | ) | (31 | ) | 0.9 | |||||||||||||||||||||
Total average interest earning assets and interest income | 243,948 | 16,194 | 6.6 | 214,187 | 13,287 | 6.2 | 188,270 | 11,528 | 6.1 | |||||||||||||||||||||||||||
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Full Year Ended | 2005 | 2004 | 2003 | |||||||||
Average | Average | Average | ||||||||||
Balance | Balance | Balance | ||||||||||
$M | $M | $M | ||||||||||
Average Non-interest Earning Assets | ||||||||||||
Bank acceptances | ||||||||||||
Australia | 16,263 | 13,877 | 13,144 | |||||||||
Overseas | — | 1 | 53 | |||||||||
Life insurance investment assets | ||||||||||||
Australia | 23,263 | 24,430 | 26,333 | |||||||||
Overseas | 4,542 | 4,120 | 4,070 | |||||||||
Property, plant and equipment | ||||||||||||
Australia | 1,108 | 792 | 627 | |||||||||
Overseas | 144 | 161 | 197 | |||||||||
Other assets | ||||||||||||
Australia | 26,150 | 29,452 | 24,046 | |||||||||
Overseas | 3,303 | 2,264 | 3,303 | |||||||||
Provisions for impairment | ||||||||||||
Australia | (1,430 | ) | (1,411 | ) | (1,497 | ) | ||||||
Overseas | (142 | ) | (150 | ) | (150 | ) | ||||||
Total average non-interest earning assets | 73,201 | 73,536 | 70,126 | |||||||||
Total Average Assets | 317,149 | 287,723 | 258,396 | |||||||||
Percentage of total average assets applicable to overseas operations | 20.5 | % | 18.7 | % | 19.5 | % |
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2005 | 2004 | 2003 | ||||||||||||||||||||||||||||||||||
Average | Average | Average | Average | Average | Average | |||||||||||||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||||||||||||
Full Year Ended | $M | $M | % | $M | $M | % | $M | $M | % | |||||||||||||||||||||||||||
Average Interest Bearing Liabilities and Loan Capital and Interest Expense | ||||||||||||||||||||||||||||||||||||
Average Liabilities and Interest Expense | ||||||||||||||||||||||||||||||||||||
Time deposits | ||||||||||||||||||||||||||||||||||||
Australia | 61,821 | 3,183 | 5.1 | 57,186 | 2,683 | 4.7 | 45,674 | 1,956 | 4.3 | |||||||||||||||||||||||||||
Overseas | 17,716 | 1,356 | 7.7 | 15,963 | 1,062 | 6.7 | 14,255 | 876 | 6.1 | |||||||||||||||||||||||||||
Savings deposits | ||||||||||||||||||||||||||||||||||||
Australia | 31,304 | 586 | 1.9 | 31,178 | 514 | 1.6 | 32,780 | 492 | 1.5 | |||||||||||||||||||||||||||
Overseas | 2,927 | 119 | 4.1 | 3,028 | 105 | 3.5 | 2,788 | 100 | 3.6 | |||||||||||||||||||||||||||
Other demand deposits | ||||||||||||||||||||||||||||||||||||
Australia | 41,235 | 1,653 | 4.0 | 39,044 | 1,499 | 3.8 | 34,043 | 1,230 | 3.6 | |||||||||||||||||||||||||||
Overseas | 4,859 | 166 | 3.4 | 3,432 | 86 | 2.5 | 2,906 | 78 | 2.7 | |||||||||||||||||||||||||||
Payables due to other financial institutions | ||||||||||||||||||||||||||||||||||||
Australia | 1,707 | 50 | 2.9 | 1,916 | 35 | 1.8 | 1,752 | 34 | 1.9 | |||||||||||||||||||||||||||
Overseas | 6,292 | 207 | 3.3 | 5,042 | 125 | 2.5 | 6,712 | 164 | 2.4 | |||||||||||||||||||||||||||
Debt issues | ||||||||||||||||||||||||||||||||||||
Australia | 34,853 | 2,095 | 6.0 | 21,885 | 1,292 | 5.9 | 17,651 | 1,047 | 5.9 | |||||||||||||||||||||||||||
Overseas | 16,540 | 462 | 2.8 | 12,855 | 213 | 1.7 | 10,738 | 305 | 2.8 | |||||||||||||||||||||||||||
Loan capital | ||||||||||||||||||||||||||||||||||||
Australia | 5,566 | 321 | 5.8 | 5,793 | 255 | 4.4 | 5,234 | 212 | 4.1 | |||||||||||||||||||||||||||
Overseas | 772 | 30 | 3.9 | 210 | 8 | 3.8 | 204 | 8 | 3.9 | |||||||||||||||||||||||||||
Other interest bearing liabilities | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Intragroup borrowings | ||||||||||||||||||||||||||||||||||||
Australia | 5,793 | 92 | 1.6 | 4,102 | 17 | 0.4 | 3,604 | 31 | 0.9 | |||||||||||||||||||||||||||
Overseas | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Average interest bearing liabilities and loan capital and interest expense including intragroup | 231,385 | 10,320 | 4.5 | 201,634 | 7,894 | 3.9 | 178,341 | 6,533 | 3.7 | |||||||||||||||||||||||||||
Intragroup eliminations | (5,793 | ) | (92 | ) | 1.6 | (4,102 | ) | (17 | ) | 0.4 | (3,604 | ) | (31 | ) | 0.9 | |||||||||||||||||||||
Total average interest bearing liabilities and loan capital and interest expense | 225,592 | 10,228 | 4.5 | 197,532 | 7,877 | 4.0 | 174,737 | 6,502 | 3.7 | |||||||||||||||||||||||||||
Non-Interest Bearing Liabilities | ||||||||||||||||||||||||||||||||||||
Deposits not bearing interest | ||||||||||||||||||||||||||||||||||||
Australia | 5,512 | 5,112 | 4,784 | |||||||||||||||||||||||||||||||||
Overseas | 1,121 | 1,059 | 871 | |||||||||||||||||||||||||||||||||
Liability on bank acceptances | ||||||||||||||||||||||||||||||||||||
Australia | 16,263 | 13,877 | 13,146 | |||||||||||||||||||||||||||||||||
Overseas | — | 1 | 53 | |||||||||||||||||||||||||||||||||
Life insurance policy liabilities | ||||||||||||||||||||||||||||||||||||
Australia | 20,732 | 20,658 | 20,828 | |||||||||||||||||||||||||||||||||
Overseas | 3,900 | 3,548 | 3,596 | |||||||||||||||||||||||||||||||||
Other liabilities | ||||||||||||||||||||||||||||||||||||
Australia | 14,630 | 20,655 | 16,034 | |||||||||||||||||||||||||||||||||
Overseas | 3,927 | 3,131 | 2,739 | |||||||||||||||||||||||||||||||||
Total average non-interest bearing liabilities | 66,085 | 68,041 | 62,051 | |||||||||||||||||||||||||||||||||
Total average liabilities and loan capital | 291,677 | 265,573 | 236,788 | |||||||||||||||||||||||||||||||||
Shareholders’ equity | 25,472 | 22,150 | 21,608 | |||||||||||||||||||||||||||||||||
Total average liabilities, loan capital and shareholders’ equity | 317,149 | 287,723 | 258,396 | |||||||||||||||||||||||||||||||||
Percentage of total average liabilities applicable to overseas operations | 19.9 | % | 18.2 | % | 18.9 | % |
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30/06/05 vs 30/06/04 | 30/06/04 vs 30/06/03 | |||||||||||||||||||||||
Changes due to | Changes due to | |||||||||||||||||||||||
Changes in Net Interest Income: | Volume | Rate | Total | Volume | Rate | Total | ||||||||||||||||||
Volume and Rate Analysis | $M | $M | $M | $M | $M | $M | ||||||||||||||||||
Interest Earning Assets | ||||||||||||||||||||||||
Cash and liquid assets | ||||||||||||||||||||||||
Australia | (14 | ) | 11 | (3 | ) | 31 | 17 | 48 | ||||||||||||||||
Overseas | 4 | (1 | ) | 3 | 1 | (1 | ) | — | ||||||||||||||||
Receivables due from other financial institutions | ||||||||||||||||||||||||
Australia | (21 | ) | 50 | 29 | 12 | (17 | ) | (5 | ) | |||||||||||||||
Overseas | (1 | ) | 19 | 18 | 2 | (6 | ) | (4 | ) | |||||||||||||||
Trading securities | ||||||||||||||||||||||||
Australia | 91 | 68 | 159 | 105 | 13 | 118 | ||||||||||||||||||
Overseas | 19 | 7 | 26 | 2 | 26 | 28 | ||||||||||||||||||
Investment securities | ||||||||||||||||||||||||
Australia | (44 | ) | 42 | (2 | ) | 11 | 26 | 37 | ||||||||||||||||
Overseas | 4 | 113 | 117 | 14 | (9 | ) | 5 | |||||||||||||||||
Loans, advances and other receivables | ||||||||||||||||||||||||
Australia | 1,473 | 432 | 1,905 | 1,164 | 225 | 1,389 | ||||||||||||||||||
Overseas | 521 | 134 | 655 | 239 | (96 | ) | 143 | |||||||||||||||||
Other interest earning assets | — | — | — | — | — | — | ||||||||||||||||||
Intragroup loans | ||||||||||||||||||||||||
Australia | — | — | — | — | — | — | ||||||||||||||||||
Overseas | 17 | 58 | 75 | 3 | (17 | ) | (14 | ) | ||||||||||||||||
Change in interest income including intragroup | 1,984 | 998 | 2,982 | 1,615 | 130 | 1,745 | ||||||||||||||||||
Intragroup eliminations | (17 | ) | (58 | ) | (75 | ) | (3 | ) | 17 | 14 | ||||||||||||||
Change in interest income | 1,911 | 996 | 2,907 | 1,597 | 162 | 1,759 | ||||||||||||||||||
Interest Bearing Liabilities and Loan Capital | ||||||||||||||||||||||||
Time deposits | ||||||||||||||||||||||||
Australia | 228 | 272 | 500 | 517 | 210 | 727 | ||||||||||||||||||
Overseas | 125 | 169 | 294 | 109 | 77 | 186 | ||||||||||||||||||
Savings deposits | ||||||||||||||||||||||||
Australia | 2 | 70 | 72 | (25 | ) | 47 | 22 | |||||||||||||||||
Overseas | (4 | ) | 18 | 14 | 8 | (3 | ) | 5 | ||||||||||||||||
Other demand deposits | ||||||||||||||||||||||||
Australia | 86 | 68 | 154 | 186 | 83 | 269 | ||||||||||||||||||
Overseas | 42 | 38 | 80 | 14 | (6 | ) | 8 | |||||||||||||||||
Payables due to other financial institutions | ||||||||||||||||||||||||
Australia | (5 | ) | 20 | 15 | 3 | (2 | ) | 1 | ||||||||||||||||
Overseas | 36 | 46 | 82 | (41 | ) | 2 | (39 | ) | ||||||||||||||||
Debt issues | ||||||||||||||||||||||||
Australia | 773 | 30 | 803 | 251 | (6 | ) | 245 | |||||||||||||||||
Overseas | 82 | 167 | 249 | 48 | (140 | ) | (92 | ) | ||||||||||||||||
Loan capital | ||||||||||||||||||||||||
Australia | (12 | ) | 78 | 66 | 24 | 19 | 43 | |||||||||||||||||
Overseas | 22 | — | 22 | — | — | — | ||||||||||||||||||
Other interest bearing liabilities | — | — | — | — | — | — | ||||||||||||||||||
Intragroup borrowings | ||||||||||||||||||||||||
Australia | 17 | 58 | 75 | 3 | (17 | ) | (14 | ) | ||||||||||||||||
Overseas | — | — | — | — | — | — | ||||||||||||||||||
Change in interest expense including intragroup | 1,246 | 1,180 | 2,426 | 877 | 484 | 1,361 | ||||||||||||||||||
Intragroup eliminations | (17 | ) | (58 | ) | (75 | ) | (3 | ) | 17 | 14 | ||||||||||||||
Change in interest expense | 1,196 | 1,155 | 2,351 | 879 | 496 | 1,375 | ||||||||||||||||||
Change in net interest income | 740 | (184 | ) | 556 | 673 | (289 | ) | 384 | ||||||||||||||||
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GROUP | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
$M | $M | $M | ||||||||||
Net interest income | 5,966 | 5,410 | 5,026 | |||||||||
Average interest earning assets | 243,948 | 214,187 | 188,270 |
2005 | 2004 | 2003 | ||||||||||
% | % | % | ||||||||||
Australia | ||||||||||||
Interest Spread(1) | 2.36 | 2.46 | 2.68 | |||||||||
Benefit of net free liabilities, provisions and equity(2) | 0.23 | 0.22 | 0.20 | |||||||||
Australia Interest Margin(3) | 2.59 | 2.68 | 2.88 | |||||||||
Overseas | ||||||||||||
Interest Spread(1) | 1.03 | 1.18 | 1.22 | |||||||||
Benefit of net free liabilities, provisions and equity(2) | 0.68 | 0.56 | 0.49 | |||||||||
Overseas Interest Margin(3) | 1.71 | 1.74 | 1.71 | |||||||||
Group | ||||||||||||
Interest Spread(1) | 2.11 | 2.22 | 2.40 | |||||||||
Benefit of net free liabilities, provisions and equity(2) | 0.34 | 0.31 | 0.27 | |||||||||
Group Interest Margin(3) | 2.45 | 2.53 | 2.67 | |||||||||
(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. |
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GROUP | BANK | |||||||||||||||||||
2005 | 2004 | 2003 | 2005 | 2004 | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
Operating profit from ordinary activities before income tax | ||||||||||||||||||||
Banking | 4,103 | 3,091 | 3,165 | 4,028 | 2,502 | |||||||||||||||
Funds Management | 560 | 504 | 217 | — | — | |||||||||||||||
Insurance | 522 | 371 | 161 | — | — | |||||||||||||||
Appraisal value uplift/(reduction) | 778 | 201 | (245 | ) | — | — | ||||||||||||||
Goodwill amortisation | (325 | ) | (324 | ) | (322 | ) | (186 | ) | (186 | ) | ||||||||||
5,638 | 3,843 | 2,976 | 3,842 | 2,316 | ||||||||||||||||
Prima facie income tax at 30% | ||||||||||||||||||||
Banking | 1,231 | 927 | 950 | 1,208 | 751 | |||||||||||||||
Funds Management | 168 | 151 | 65 | — | — | |||||||||||||||
Insurance | 157 | 111 | 48 | — | — | |||||||||||||||
Appraisal value uplift/(reduction) | 233 | 60 | (73 | ) | — | — | ||||||||||||||
Goodwill amortisation | (98 | ) | (97 | ) | (97 | ) | (56 | ) | (56 | ) | ||||||||||
1,691 | 1,152 | 893 | 1,152 | 695 | ||||||||||||||||
Add (or deduct) permanent differences expressed on a tax effect basis: | ||||||||||||||||||||
Current Period | ||||||||||||||||||||
Specific provisions for offshore bad and doubtful debts not tax effected | 4 | 3 | 13 | — | (2 | ) | ||||||||||||||
Taxation offsets (net of accruals) | (48 | ) | (47 | ) | (36 | ) | (309 | ) | (224 | ) | ||||||||||
Tax adjustment referable to policy holder income | 160 | 142 | (41 | ) | — | — | ||||||||||||||
Non assessable income — life insurance surplus | (30 | ) | (30 | ) | (18 | ) | — | — | ||||||||||||
Change in excess of net market value over net assets of life insurance controlled entities | (233 | ) | (60 | ) | 73 | — | — | |||||||||||||
Non deductible goodwill amortisation | 98 | 97 | 97 | 56 | 56 | |||||||||||||||
Non deductible intergroup losses | — | — | — | — | 136 | |||||||||||||||
Tax losses recognised | (9 | ) | — | (18 | ) | (2 | ) | 1 | ||||||||||||
Other | 4 | 17 | (5 | ) | 23 | 5 | ||||||||||||||
(54 | ) | 122 | 65 | (232 | ) | (28 | ) | |||||||||||||
Prior Periods | ||||||||||||||||||||
Other | — | (12 | ) | — | — | 2 | ||||||||||||||
Total income tax expense | 1,637 | 1,262 | 958 | 920 | 669 | |||||||||||||||
Income tax attributable to operating profit | ||||||||||||||||||||
Banking | 1,220 | 914 | 931 | 920 | 669 | |||||||||||||||
Funds management | 100 | 79 | 57 | — | — | |||||||||||||||
Insurance | 89 | 66 | 28 | — | — | |||||||||||||||
Corporate tax | 1,409 | 1,059 | 1,016 | 920 | 669 | |||||||||||||||
Policyholder tax | 228 | 203 | (58 | ) | — | — | ||||||||||||||
Total Income Tax expense | 1,637 | 1,262 | 958 | 920 | 669 | |||||||||||||||
Income tax expense comprises: | ||||||||||||||||||||
Current taxation provision | 1,611 | 1,128 | 917 | 1,068 | 639 | |||||||||||||||
Deferred income (benefit)/tax provision | 139 | 138 | (24 | ) | (30 | ) | (32 | ) | ||||||||||||
Future income tax benefit | (125 | ) | (24 | ) | 45 | (121 | ) | 57 | ||||||||||||
Notional tax expense — leveraged leases | 8 | 23 | 22 | 2 | 5 | |||||||||||||||
Other | 4 | (3 | ) | (2 | ) | 1 | — | |||||||||||||
Total Income Tax Expense | 1,637 | 1,262 | 958 | 920 | 669 | |||||||||||||||
The components of income tax expense consist of the following: | ||||||||||||||||||||
Current Australia | 1,438 | 977 | 853 | 1,059 | 633 | |||||||||||||||
Overseas | 175 | 156 | 112 | 9 | 12 | |||||||||||||||
1,613 | 1,133 | 965 | 1,068 | 645 | ||||||||||||||||
Deferred Australia | (5 | ) | 99 | (1 | ) | (148 | ) | 20 | ||||||||||||
Overseas | 29 | 30 | (6 | ) | — | 4 | ||||||||||||||
24 | 129 | (7 | ) | (148 | ) | 24 | ||||||||||||||
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GROUP | BANK | |||||||||||||||||||
2005 | 2004 | 2003 | 2005 | 2004 | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
The significant temporary differences are as follows: | ||||||||||||||||||||
Deferred income tax assets arising from: | ||||||||||||||||||||
Provisions not tax deductible until expense incurred | 442 | 369 | 353 | 399 | 274 | |||||||||||||||
Other | 208 | 195 | 172 | 178 | 149 | |||||||||||||||
Future income tax benefits (Note 21) | 650 | 564 | 525 | 577 | 423 | |||||||||||||||
Intergroup deferred tax receivable (Note 21) | — | — | — | 549 | 317 | |||||||||||||||
Deferred income tax liabilities arising from: | ||||||||||||||||||||
Leveraged leasing | 193 | 232 | 302 | 193 | 232 | |||||||||||||||
Lease financing | 103 | 100 | 96 | 99 | 100 | |||||||||||||||
Other | 421 | 52 | 16 | 365 | — | |||||||||||||||
Total deferred income tax liabilities (Note 24) | 717 | 384 | 414 | 657 | 332 | |||||||||||||||
Intergroup deferred tax payable (Note 27) | — | — | — | 60 | 153 | |||||||||||||||
Future income tax benefits attributable to tax losses carried forward as an asset | 3 | 5 | 36 | — | — | |||||||||||||||
Future income tax benefits not taken to account Valuation allowance | ||||||||||||||||||||
Opening balance | 170 | 142 | 168 | 94 | 62 | |||||||||||||||
Prior year adjustments | (33 | ) | (6 | ) | (34 | ) | (33 | ) | (3 | ) | ||||||||||
Benefits now taken to account | (9 | ) | (6 | ) | (18 | ) | (2 | ) | (5 | ) | ||||||||||
Benefits arising during the year not recognised | 31 | 40 | 26 | 20 | 40 | |||||||||||||||
Closing balance (Note 21) | 159 | 170 | 142 | 79 | 94 | |||||||||||||||
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GROUP | BANK | |||||||||||||||||||
2005 | 2004 | 2003 | 2005 | 2004 | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
Ordinary Shares | ||||||||||||||||||||
Interim ordinary dividend (fully franked) (2005: 85 cents, 2004: 79 cents, 2003: 69 cents) | ||||||||||||||||||||
Interim ordinary dividend paid — cash component only | 883 | 808 | 699 | 883 | 808 | |||||||||||||||
Interim ordinary dividend paid — dividend reinvestment plan | 200 | 188 | 166 | 200 | 188 | |||||||||||||||
Preference Shares | ||||||||||||||||||||
Preference dividends paid (fully franked) (2005: 1,115 cents, 2004: 1,065 cents, 2003: 1,019 cents) | 29 | 28 | 28 | 29 | 28 | |||||||||||||||
Provision for preference dividend | 10 | 9 | 8 | 10 | 9 | |||||||||||||||
Other Equity Instruments | ||||||||||||||||||||
Dividends paid | 76 | 55 | — | 34 | 15 | |||||||||||||||
Other dividends — ASB preference shares | 16 | 8 | 4 | — | — | |||||||||||||||
Total Dividends Provided or Paid | 1,214 | 1,096 | 905 | 1,156 | 1,048 | |||||||||||||||
Other provision carried | 4 | 5 | 4 | 4 | 4 | |||||||||||||||
Dividends proposed and not recognised as a liability (fully franked) (2005: 112 cents , 2004: 104 cents, 2003: 85 cents) | 1,434 | 1,315 | 1,066 | 1,434 | 1,315 |
Cents | Half-year | Full Year | Full Year | DRP | DRP | |||||||||||||||||||
Per | Payout | Payout | Payout Ratio | Price | Participation | |||||||||||||||||||
Half Year Ended | Share | Ratio(1) | Ratio(1) | Cash Basis(2) | $ | Rate(3) | ||||||||||||||||||
31 December 2002 | 69 | 143.2 | % | — | — | 24.75 | 19.2 | % | ||||||||||||||||
30 June 2003 | 85 | 77.7 | % | 97.7 | % | 75.9 | % | 28.03 | 18.9 | % | ||||||||||||||
31 December 2003 | 79 | 82.7 | % | — | — | 31.61 | 18.8 | % | ||||||||||||||||
30 June 2004 | 104 | 103.8 | % | 93.5 | % | 73.9 | %(4) | 30.14 | 18.7 | % | ||||||||||||||
31 December 2004 | 85 | 71.8 | % | — | — | 35.90 | 18.6 | % | ||||||||||||||||
30 June 2005 | 112 | 69.5 | % | 65.2 | % | 73.9 | % |
(1) | Dividend Payout Ratio: dividends divided by earnings. | |
(2) | Payout ratio based on net profit after tax before goodwill amortisation and appraisal value uplift/(reduction). | |
(3) | DRP Participation Rate: the percentage of total issued share capital participating in the Dividend Reinvestment Plan. | |
(4) | Adjusted for Which new Bank costs. |
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GROUP | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
c | c | c | ||||||||||
Earnings Per Ordinary Share | ||||||||||||
— Basic | 303.1 | 196.9 | 157.4 | |||||||||
— Fully diluted | 303.0 | 196.8 | 157.3 |
$M | $M | $M | ||||||||||
Reconciliation of earnings used in the calculation of earnings per share | ||||||||||||
Profit from ordinary activities after income tax | 4,001 | 2,581 | 2,018 | |||||||||
Less: Preference share dividends | (39 | ) | (37 | ) | (36 | ) | ||||||
Less: Other equity instrument dividends | (76 | ) | (55 | ) | — | |||||||
Less: Other dividends — ASB preference shares | (16 | ) | (8 | ) | (4 | ) | ||||||
Less: Outside equity interests | (10 | ) | (9 | ) | (6 | ) | ||||||
Earnings used in calculation of earnings per share | 3,860 | 2,472 | 1,972 | |||||||||
Number of Shares | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
M | M | M | ||||||||||
Weighted average number of ordinary shares used in the calculation of basic earnings per share | 1,273 | 1,256 | 1,253 | |||||||||
Effect of dilutive securities — share options | 1 | 1 | 1 | |||||||||
Weighted average number of ordinary shares used in the calculation of fully diluted earnings per share | 1,274 | 1,257 | 1,254 | |||||||||
c | c | c | ||||||||||
Underlying Earnings Per Ordinary Share | ||||||||||||
— Basic | 261.9 | 237.1 | 210.2 | |||||||||
— Fully diluted | 261.8 | 237.0 | 210.2 |
GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Australia | ||||||||||||||||
Notes, coins and cash at bankers | 1,491 | 1,488 | 1,312 | 1,423 | ||||||||||||
Money at short call | 3 | 3 | — | — | ||||||||||||
Securities purchased under agreements to resell | 2,598 | 4,091 | 2,598 | 4,091 | ||||||||||||
Bills receivable and remittances in transit | 372 | 158 | 371 | 156 | ||||||||||||
Total Australia | 4,464 | 5,740 | 4,281 | 5,670 | ||||||||||||
Overseas | ||||||||||||||||
Notes, coins and cash at bankers | 68 | 60 | 5 | — | ||||||||||||
Money at short call | 307 | 261 | 45 | 77 | ||||||||||||
Securities purchased under agreements to resell | 876 | 374 | 1,243 | 738 | ||||||||||||
Bills receivable and remittances in transit | — | 18 | — | — | ||||||||||||
Total Overseas | 1,251 | 713 | 1,293 | 815 | ||||||||||||
Total Cash and Liquid Assets | 5,715 | 6,453 | 5,574 | 6,485 | ||||||||||||
GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Australia | 3,691 | 4,914 | 4,161 | 4,910 | ||||||||||||
Overseas | 2,514 | 3,455 | 1,972 | 2,158 | ||||||||||||
Total Receivables from Other Financial Institutions | 6,205 | 8,369 | 6,133 | 7,068 | ||||||||||||
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GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Australia | ||||||||||||||||
Listed: | ||||||||||||||||
Australian Public Securities | ||||||||||||||||
Commonwealth and States | 283 | 621 | 283 | 621 | ||||||||||||
Local and semi-government | 505 | 1,114 | 505 | 1,114 | ||||||||||||
Bills of exchange | 1,346 | 1,576 | 1,346 | 1,576 | ||||||||||||
Certificates of deposit | 5,977 | 5,088 | 5,977 | 5,088 | ||||||||||||
Medium term notes | 1,949 | 1,410 | 1,949 | 1,410 | ||||||||||||
Other securities | 196 | 273 | 181 | 267 | ||||||||||||
Unlisted: | ||||||||||||||||
Commercial paper | 767 | 885 | 878 | 889 | ||||||||||||
Medium term notes | — | 268 | — | 268 | ||||||||||||
Other securities | — | 75 | — | — | ||||||||||||
Total Australia | 11,023 | 11,310 | 11,119 | 11,233 | ||||||||||||
Overseas | ||||||||||||||||
Listed: | ||||||||||||||||
Government securities | 358 | 826 | 248 | 284 | ||||||||||||
Eurobonds | 502 | 524 | 502 | 524 | ||||||||||||
Bills of exchange | 1,559 | 772 | — | — | ||||||||||||
Floating rate notes | 563 | 836 | 563 | 836 | ||||||||||||
Commercial paper | 367 | 403 | — | — | ||||||||||||
Unlisted: | ||||||||||||||||
Commercial paper | 6 | 17 | — | — | ||||||||||||
Other securities | 250 | 208 | — | — | ||||||||||||
Total Overseas | 3,605 | 3,586 | 1,313 | 1,644 | ||||||||||||
Total Trading Securities | 14,628 | 14,896 | 12,432 | 12,877 | ||||||||||||
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GROUP | BANK | |||||||||||||||||||
2005 | 2004 | 2003 | 2005 | 2004 | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
Australia | ||||||||||||||||||||
Listed: | ||||||||||||||||||||
Australian Public Securities | ||||||||||||||||||||
Commonwealth and States | 2,201 | 2,209 | 1,915 | 2,201 | 2,209 | |||||||||||||||
Bills of exchange | — | 30 | — | — | — | |||||||||||||||
Other securities and equity investments | 343 | 444 | 439 | 336 | 433 | |||||||||||||||
Unlisted: | ||||||||||||||||||||
Australian Public Securities | ||||||||||||||||||||
Local and semi-government | 80 | 80 | 80 | — | — | |||||||||||||||
Medium term notes | 220 | 448 | 942 | 220 | 58 | |||||||||||||||
Mortgage backed securities | 1,055 | — | — | 1,055 | — | |||||||||||||||
Other securities and equity investments | 672 | 611 | 965 | 71 | 69 | |||||||||||||||
Total Australia | 4,571 | 3,822 | 4,341 | 3,883 | 2,769 | |||||||||||||||
Overseas | ||||||||||||||||||||
Listed: | ||||||||||||||||||||
Government securities | 79 | 758 | 484 | 63 | 715 | |||||||||||||||
Treasury notes | — | — | 5 | — | — | |||||||||||||||
Certificates of deposit | 1,376 | 1,242 | 1,357 | 1,341 | 1,228 | |||||||||||||||
Eurobonds | 636 | 792 | 993 | 600 | 655 | |||||||||||||||
Medium term notes | 378 | 425 | 239 | 122 | 142 | |||||||||||||||
Floating rate notes | 619 | 732 | 324 | 177 | 121 | |||||||||||||||
Other securities | 165 | 377 | 1,392 | 76 | 279 | |||||||||||||||
Unlisted: | ||||||||||||||||||||
Government securities | 224 | 137 | 98 | — | — | |||||||||||||||
Eurobonds | 477 | 155 | 230 | 76 | 155 | |||||||||||||||
Medium term notes | 254 | 1,200 | 583 | 221 | 189 | |||||||||||||||
Floating rate notes | 452 | 709 | 900 | 286 | 273 | |||||||||||||||
Preference shares | 744 | 744 | — | — | — | |||||||||||||||
Other securities and equity investments | 297 | 354 | 90 | 77 | 100 | |||||||||||||||
Total Overseas | 5,701 | 7,625 | 6,695 | 3,039 | 3,857 | |||||||||||||||
Total Investment Securities | 10,272 | 11,447 | 11,036 | 6,922 | 6,626 | |||||||||||||||
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GROUP | ||||||||||||
Market Value at 30 June | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
$M | $M | $M | ||||||||||
Australia | ||||||||||||
Australian Public Securities | ||||||||||||
Commonwealth and States | 2,334 | 2,328 | 2,118 | |||||||||
Bills of exchange | — | 30 | — | |||||||||
Medium term notes | 224 | 449 | 935 | |||||||||
Mortgage backed securities | 1,055 | — | — | |||||||||
Other securities and equity investments | 1,079 | 1,034 | 1,400 | |||||||||
Total Australia | 4,692 | 3,841 | 4,453 | |||||||||
Overseas | ||||||||||||
Government securities | 306 | 897 | 593 | |||||||||
Treasury notes | — | — | 5 | |||||||||
Certificates of deposit | 1,376 | 1,223 | 1,357 | |||||||||
Eurobonds | 1,133 | 983 | 1,260 | |||||||||
Medium term notes | 637 | 1,622 | 816 | |||||||||
Floating rate notes | 1,075 | 1,442 | 1,215 | |||||||||
Preference shares | 744 | 744 | — | |||||||||
Other securities and equity investments | 470 | 738 | 1,488 | |||||||||
Total Overseas | 5,741 | 7,649 | 6,734 | |||||||||
Total Investment Securities | 10,433 | 11,490 | 11,187 | |||||||||
Net Unrealised Surplus | 161 | 43 | 151 | |||||||||
At 30 June 2005 | At 30 June 2004 | |||||||||||||||||||||||||||||||
Amortised | Gross | Unrealised | Fair | Amortised | Gross | Unrealised | Fair | |||||||||||||||||||||||||
Cost | Gains | Losses | Value | Cost | Gains | Losses | Value | |||||||||||||||||||||||||
$M | $M | $M | $M | $M | $M | $M | $M | |||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||||||
Australian Public Securities | ||||||||||||||||||||||||||||||||
Commonwealth and States | 2,281 | 54 | 1 | 2,334 | 2,289 | 46 | 7 | 2,328 | ||||||||||||||||||||||||
Bills of exchange | — | — | — | — | 30 | — | — | 30 | ||||||||||||||||||||||||
Medium term notes | 220 | 4 | — | 224 | 448 | 1 | — | 449 | ||||||||||||||||||||||||
Mortgage backed securities | 1,055 | — | — | 1,055 | — | — | — | — | ||||||||||||||||||||||||
Other securities and equity investments(1) | 1,015 | 64 | — | 1,079 | 1,055 | 11 | 32 | 1,034 | ||||||||||||||||||||||||
Total Australia | 4,571 | 122 | 1 | 4,692 | 3,822 | 58 | 39 | 3,841 | ||||||||||||||||||||||||
Overseas | ||||||||||||||||||||||||||||||||
Government securities | 303 | 3 | — | 306 | 895 | 3 | 1 | 897 | ||||||||||||||||||||||||
Certificates of deposit | 1,376 | — | — | 1,376 | 1,242 | — | 19 | 1,223 | ||||||||||||||||||||||||
Eurobonds | 1,113 | 21 | 1 | 1,133 | 947 | 36 | — | 983 | ||||||||||||||||||||||||
Medium term notes | 632 | 6 | 1 | 637 | 1,625 | — | 3 | 1,622 | ||||||||||||||||||||||||
Floating rate notes | 1,071 | 4 | — | 1,075 | 1,441 | 1 | — | 1,442 | ||||||||||||||||||||||||
Preference shares | 744 | — | — | 744 | 744 | — | — | 744 | ||||||||||||||||||||||||
Other securities and equity investments | 462 | 8 | — | 470 | 731 | 7 | — | 738 | ||||||||||||||||||||||||
Total Overseas | 5,701 | 42 | 2 | 5,741 | 7,625 | 47 | 23 | 7,649 | ||||||||||||||||||||||||
Total Investment Securities | 10,272 | 164 | 3 | 10,433 | 11,447 | 105 | 62 | 11,490 | ||||||||||||||||||||||||
(1) | Equity derivatives are in place to hedge equity market risk in respect of structured equity products for customers. There are $42 million of net deferred losses on these contracts (2004: $31 million net deferred gains) which offset the above unrealised gains and these are disclosed within Note 39. At the end of the financial year there were no net deferred gains or losses included in the amortised cost value. |
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Group | ||||||||||||||||||||||||||||||||||||
Maturity Period at 30 June 2005 | ||||||||||||||||||||||||||||||||||||
1 to 12 months | 1 to 5 years | 5 to 10 years | 10 years or more | Total | ||||||||||||||||||||||||||||||||
$M | % | $M | % | $M | % | $M | % | $M | ||||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||||||||||
Australian Public Securities | ||||||||||||||||||||||||||||||||||||
Commonwealth and States | 253 | 5.23 | 1,418 | 6.01 | 544 | 5.47 | 66 | 6.14 | 2,281 | |||||||||||||||||||||||||||
Medium term notes | 3 | 8.00 | 202 | 6.23 | 15 | 8.00 | — | — | 220 | |||||||||||||||||||||||||||
Mortgage backed | — | — | — | — | — | — | 1,055 | 5.36 | 1,055 | |||||||||||||||||||||||||||
Other securities, commercial paper and equity investments | 325 | 5.68 | 683 | 5.78 | — | — | 7 | 3.64 | 1,015 | |||||||||||||||||||||||||||
Total Australia | 581 | 2,303 | 559 | 1,128 | 4,571 | |||||||||||||||||||||||||||||||
Overseas | ||||||||||||||||||||||||||||||||||||
Government securities | 175 | 7.02 | 69 | 7.59 | 59 | 1.40 | — | — | 303 | |||||||||||||||||||||||||||
Certificates of deposit | 1,338 | 3.68 | 38 | 3.14 | — | — | — | — | 1,376 | |||||||||||||||||||||||||||
Eurobonds | 209 | 3.26 | 849 | 5.06 | 55 | 5.20 | — | — | 1,113 | |||||||||||||||||||||||||||
Medium term notes | 111 | 6.20 | 521 | 3.10 | — | — | — | — | 632 | |||||||||||||||||||||||||||
Floating rate notes | 124 | 2.23 | 881 | 6.23 | 38 | 3.68 | 28 | 1.72 | 1,071 | |||||||||||||||||||||||||||
Preference shares | — | — | — | — | 744 | 6.33 | — | — | 744 | |||||||||||||||||||||||||||
Other securities, commercial paper and equity investments | 109 | 7.27 | 353 | 3.97 | — | — | — | — | 462 | |||||||||||||||||||||||||||
Total Overseas | 2,066 | 2,711 | 896 | 28 | 5,701 | |||||||||||||||||||||||||||||||
Total Investment Securities | 2,647 | 5,014 | 1,455 | 1,156 | 10,272 | |||||||||||||||||||||||||||||||
Maturities at Fair Value | 2,692 | 5,066 | 1,497 | 1,178 | 10,433 | |||||||||||||||||||||||||||||||
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GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Australia | ||||||||||||||||
Overdrafts | 2,564 | 2,423 | 2,564 | 2,423 | ||||||||||||
Housing loans | 119,094 | 104,883 | 115,667 | 101,717 | ||||||||||||
Credit card outstandings | 6,682 | 5,890 | 6,682 | 5,890 | ||||||||||||
Lease financing | 4,313 | 3,843 | 1,348 | 1,279 | ||||||||||||
Bills discounted | 3,399 | 3,454 | 3,399 | 3,454 | ||||||||||||
Term loans | 46,451 | 39,708 | 41,447 | 36,943 | ||||||||||||
Redeemable preference share financing | 9 | 37 | 9 | 37 | ||||||||||||
Equity participation in leveraged leases | 742 | 1,120 | 376 | 433 | ||||||||||||
Other lending | 390 | 420 | 750 | 587 | ||||||||||||
Total Australia | 183,644 | 161,778 | 172,242 | 152,763 | ||||||||||||
Overseas | ||||||||||||||||
Overdrafts | 2,660 | 2,481 | — | — | ||||||||||||
Housing loans | 20,765 | 16,967 | 54 | 46 | ||||||||||||
Credit card outstandings | 406 | 358 | — | — | ||||||||||||
Lease financing | 195 | 175 | 127 | 81 | ||||||||||||
Term loans | 12,804 | 10,314 | 3,686 | 3,222 | ||||||||||||
Redeemable preference share financing | — | 262 | — | — | ||||||||||||
Other lending | 192 | 60 | — | — | ||||||||||||
Total Overseas | 37,022 | 30,617 | 3,867 | 3,349 | ||||||||||||
Gross Loans, Advances and Other Receivables | 220,666 | 192,395 | 176,109 | 156,112 | ||||||||||||
Less | ||||||||||||||||
Provisions for impairment (Note 13) | ||||||||||||||||
General provision | (1,390 | ) | (1,393 | ) | (1,218 | ) | (1,242 | ) | ||||||||
Specific provision against loans and advances | (157 | ) | (143 | ) | (134 | ) | (121 | ) | ||||||||
Unearned income | ||||||||||||||||
Term loans | (889 | ) | (758 | ) | (426 | ) | (412 | ) | ||||||||
Lease financing | (589 | ) | (541 | ) | (154 | ) | (151 | ) | ||||||||
Leveraged leases | (84 | ) | (111 | ) | (18 | ) | (21 | ) | ||||||||
Interest reserved | (19 | ) | (23 | ) | (19 | ) | (23 | ) | ||||||||
Unearned tax remissions on leveraged leases | (22 | ) | (35 | ) | — | (3 | ) | |||||||||
(3,150 | ) | (3,004 | ) | (1,969 | ) | (1,973 | ) | |||||||||
Net Loans, Advances and Other Receivables | 217,516 | 189,391 | 174,140 | 154,139 | ||||||||||||
Lease receivables, net of unearned income (included above) | ||||||||||||||||
Current | 1,179 | 1,072 | 542 | 592 | ||||||||||||
Non current | 2,740 | 2,405 | 779 | 617 | ||||||||||||
3,919 | 3,477 | 1,321 | 1,209 | |||||||||||||
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GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Finance Leases | ||||||||||||||||
Minimum lease payments receivable: | ||||||||||||||||
No later than one year | 1,417 | 1,189 | 595 | 640 | ||||||||||||
Later than one year but not later than five years | 2,379 | 1,861 | 836 | 570 | ||||||||||||
Later than five years | 712 | 968 | 44 | 150 | ||||||||||||
Lease financing | 4,508 | 4,018 | 1,475 | 1,360 | ||||||||||||
Leverage Leases | ||||||||||||||||
Minimum lease payments receivable: | ||||||||||||||||
No later than one year | 185 | 421 | 227 | 217 | ||||||||||||
Later than one year but not later than five years | 505 | 546 | 133 | 97 | ||||||||||||
Later than five years | 52 | 153 | 16 | 119 | ||||||||||||
Equity Participation in Leverage Leasing | 742 | 1,120 | 376 | 433 | ||||||||||||
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GROUP | ||||||||||||||||
Maturity Period at 30 June 2005 | ||||||||||||||||
Maturing | ||||||||||||||||
Maturing | Between | Maturing | ||||||||||||||
One Year | One & Five | After Five | ||||||||||||||
or Less | Years | Years | Total | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Australia | ||||||||||||||||
Government and public authorities | 871 | 679 | 1,450 | 3,000 | ||||||||||||
Agriculture, forestry and fishing | 1,120 | 937 | 1,156 | 3,213 | ||||||||||||
Financial, investment and insurance | 3,688 | 1,664 | 530 | 5,882 | ||||||||||||
Real estate | ||||||||||||||||
Mortgage(1) | 15,588 | 16,201 | 87,306 | 119,095 | ||||||||||||
Construction(2) | 637 | 777 | 280 | 1,694 | ||||||||||||
Personal | 5,606 | 8,286 | 612 | 14,504 | ||||||||||||
Lease financing | 1,505 | 2,796 | 754 | 5,055 | ||||||||||||
Other commercial and industrial | 18,825 | 7,725 | 4,651 | 31,201 | ||||||||||||
Total Australia | 47,840 | 39,065 | 96,739 | 183,644 | ||||||||||||
Overseas | ||||||||||||||||
Government and public authorities | 96 | 82 | 38 | 216 | ||||||||||||
Agriculture, forestry and fishing | 698 | 1,404 | 1,270 | 3,372 | ||||||||||||
Financial, investment and insurance | 2,263 | 2,295 | 2,469 | 7,027 | ||||||||||||
Real estate | ||||||||||||||||
Mortgage(1) | 1,987 | 7,131 | 11,647 | 20,765 | ||||||||||||
Construction(2) | 91 | 91 | 89 | 271 | ||||||||||||
Personal | 399 | 151 | 2 | 552 | ||||||||||||
Lease financing | 97 | 88 | 10 | 195 | ||||||||||||
Other commercial and industrial | 3,218 | 885 | 521 | 4,624 | ||||||||||||
Total Overseas | 8,849 | 12,127 | 16,046 | 37,022 | ||||||||||||
Gross Loans, Advances and Other Receivables | 56,689 | 51,192 | 112,785 | 220,666 | ||||||||||||
Interest Rate Sensitivity of Lending | ||||||||||||||||
Australia | 29,003 | 23,794 | 65,425 | 118,222 | ||||||||||||
Overseas | 3,321 | 3,368 | 3,722 | 10,411 | ||||||||||||
Total Variable Interest Rates | 32,324 | 27,162 | 69,147 | 128,633 | ||||||||||||
Australia | 18,837 | 15,271 | 31,314 | 65,422 | ||||||||||||
Overseas | 5,528 | 8,759 | 12,324 | 26,611 | ||||||||||||
Total Fixed Interest Rates | 24,365 | 24,030 | 43,638 | 92,033 | ||||||||||||
Gross Loans, Advances and Other Receivables | 56,689 | 51,192 | 112,785 | 220,666 | ||||||||||||
(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. |
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GROUP | BANK | |||||||||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | 2005 | 2004 | ||||||||||||||||||||||
$M | $M | $M | $M | $M | $M | $M | ||||||||||||||||||||||
General Provisions | ||||||||||||||||||||||||||||
Opening balance | 1,393 | 1,325 | 1,356 | 1,399 | 1,358 | 1,242 | 1,152 | |||||||||||||||||||||
Charge against profit | 322 | 276 | 305 | 449 | 385 | 292 | 263 | |||||||||||||||||||||
Acquired provisions, including fair value adjustments | — | — | — | — | 51 | — | — | |||||||||||||||||||||
Transfer to specific provisions | (352 | ) | (202 | ) | (350 | ) | (495 | ) | (411 | ) | (326 | ) | (189 | ) | ||||||||||||||
Bad debts recovered | 81 | 79 | 74 | 56 | 88 | 60 | 66 | |||||||||||||||||||||
Adjustments for exchange rate fluctuations and other items | 2 | 2 | (9 | ) | 1 | (29 | ) | (1 | ) | 19 | ||||||||||||||||||
1,446 | 1,480 | 1,376 | 1,410 | 1,442 | 1,267 | 1,311 | ||||||||||||||||||||||
Bad debts written off | (56 | ) | (87 | ) | (51 | ) | (54 | ) | (43 | ) | (49 | ) | (69 | ) | ||||||||||||||
Closing balance | 1,390 | 1,393 | 1,325 | 1,356 | 1,399 | 1,218 | 1,242 | |||||||||||||||||||||
Specific Provisions | ||||||||||||||||||||||||||||
Opening balance | 143 | 205 | 270 | 234 | 432 | 121 | 157 | |||||||||||||||||||||
Charge against profit | — | — | — | — | — | — | — | |||||||||||||||||||||
Acquired provisions, including fair value adjustments | — | — | — | — | 6 | — | — | |||||||||||||||||||||
Transfer from general provision for New and increased provisioning | 408 | 264 | 416 | 546 | 495 | 378 | 243 | |||||||||||||||||||||
Less write-back of provisions no longer required | (56 | ) | (62 | ) | (66 | ) | (51 | ) | (84 | ) | (52 | ) | (54 | ) | ||||||||||||||
Net transfer | 352 | 202 | 350 | 495 | 411 | 326 | 189 | |||||||||||||||||||||
Adjustments for exchange rate fluctuations and other items | (3 | ) | 3 | (11 | ) | (11 | ) | (17 | ) | — | 2 | |||||||||||||||||
492 | 410 | 609 | 718 | 832 | 447 | 348 | ||||||||||||||||||||||
Bad debts written off | (335 | ) | (267 | ) | (404 | ) | (448 | ) | (598 | ) | (313 | ) | (227 | ) | ||||||||||||||
Closing balance | 157 | 143 | 205 | 270 | 234 | 134 | 121 | |||||||||||||||||||||
Total Provisions for Impairment | 1,547 | 1,536 | 1,530 | 1,626 | 1,633 | 1,352 | 1,363 | |||||||||||||||||||||
Specific provisions for impairment comprise the following segments: | ||||||||||||||||||||||||||||
Provisions against loans and advances | 157 | 143 | 205 | 270 | 233 | 134 | 121 | |||||||||||||||||||||
Provisions for diminution | — | — | — | — | 1 | — | — | |||||||||||||||||||||
Total | 157 | 143 | 205 | 270 | 234 | 134 | 121 | |||||||||||||||||||||
% | % | % | % | % | % | % | ||||||||||||||||||||||
Provision Ratios | ||||||||||||||||||||||||||||
Specific provisions for impairment as % of gross impaired assets net of interest reserved | 41.76 | 42.06 | 32.08 | 30.54 | 36.06 | 37.81 | 36.00 | |||||||||||||||||||||
Total provisions for impairment as % of gross impaired assets net of interest reserved | 411.44 | 451.76 | 239.44 | 183.94 | 251.62 | 381.49 | 403.55 | |||||||||||||||||||||
General provisions as % of risk weighted assets | 0.73 | 0.82 | 0.90 | 0.96 | 1.01 | 0.68 | 0.79 |
$M | $M | $M | $M | $M | $M | $M | ||||||||||||||||||||||
Charge to profit and loss for bad and doubtful debts comprises: | ||||||||||||||||||||||||||||
General provisions | 322 | 276 | 305 | 449 | 385 | 292 | 263 | |||||||||||||||||||||
Specific provisions | — | — | — | — | — | — | — | |||||||||||||||||||||
Total Charge for Bad and Doubtful Debts | 322 | 276 | 305 | 449 | 385 | 292 | 263 | |||||||||||||||||||||
Ratio of net charge-offs during the period to average gross loans, advances and other receivables outstanding during the period | 0.16 | % | 0.16 | % | 0.19 | % | 0.31 | % | 0.28 | % | 0.18 | % | 0.18 | % |
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GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Total charge for bad and doubtful debts | 322 | 276 | 292 | 263 | ||||||||||||
The charge is required for: | ||||||||||||||||
Specific Provisioning | ||||||||||||||||
New and increased provisioning | 408 | 264 | 378 | 243 | ||||||||||||
Less provisions no longer required | (56 | ) | (62 | ) | (52 | ) | (54 | ) | ||||||||
Net specific provisioning | 352 | 202 | 326 | 189 | ||||||||||||
Provided from general provision | (352 | ) | (202 | ) | (326 | ) | (189 | ) | ||||||||
Charge to profit and loss | — | — | — | — | ||||||||||||
General Provisioning | ||||||||||||||||
Direct write-offs | 56 | 87 | 49 | 69 | ||||||||||||
Recoveries of amounts previously written off | (81 | ) | (79 | ) | (60 | ) | (66 | ) | ||||||||
Movement in general provision | (5 | ) | 66 | (23 | ) | 71 | ||||||||||
Funding of specific provisions | 352 | 202 | 326 | 189 | ||||||||||||
Charge to profit and loss | 322 | 276 | 292 | 263 | ||||||||||||
Total Charge for Bad and Doubtful Debts | 322 | 276 | 292 | 263 | ||||||||||||
GROUP | ||||||||||||||||||||
At 30 June | ||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
Australia | ||||||||||||||||||||
Government and public authorities | — | — | — | — | — | |||||||||||||||
Agriculture, forestry and fishing | 16 | 2 | 3 | 10 | 8 | |||||||||||||||
Financial, investment and insurance | 1 | 1 | 2 | 26 | 24 | |||||||||||||||
Real estate | ||||||||||||||||||||
Mortgage(1) | 3 | 6 | 6 | 6 | 4 | |||||||||||||||
Construction(2) | 7 | 4 | — | 4 | 6 | |||||||||||||||
Personal | 63 | 38 | 36 | 35 | 28 | |||||||||||||||
Lease financing | 5 | 3 | 4 | 6 | 7 | |||||||||||||||
Other commercial and industrial | 49 | 74 | 112 | 134 | 77 | |||||||||||||||
Total Australia | 144 | 128 | 163 | 221 | 154 | |||||||||||||||
Overseas | ||||||||||||||||||||
Government and public authorities | — | — | 10 | 11 | 15 | |||||||||||||||
Agriculture, forestry and fishing | — | — | 1 | — | — | |||||||||||||||
Financial, investment and insurance | 1 | — | — | 12 | 4 | |||||||||||||||
Real estate | ||||||||||||||||||||
Mortgage(1) | 11 | 6 | 7 | 3 | 7 | |||||||||||||||
Construction(2) | — | — | — | — | — | |||||||||||||||
Personal | 1 | 8 | 4 | 3 | 3 | |||||||||||||||
Lease financing | — | — | — | — | — | |||||||||||||||
Other commercial and industrial | — | 1 | 20 | 20 | 51 | |||||||||||||||
Total Overseas | 13 | 15 | 42 | 49 | 80 | |||||||||||||||
Total Specific Provisions | 157 | 143 | 205 | 270 | 234 | |||||||||||||||
(1) | Principally owner occupied housing. | |
(2) | Primarily financing real estate and land development projects. |
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GROUP | ||||||||||||||||||||
Year Ended 30 June | ||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
Bad Debts Written Off | ||||||||||||||||||||
Australia | ||||||||||||||||||||
Government and public authorities | — | — | — | — | — | |||||||||||||||
Agriculture, forestry and fishing | 1 | 2 | 4 | 6 | 10 | |||||||||||||||
Financial, investment and insurance | 4 | 6 | 26 | 6 | 1 | |||||||||||||||
Real estate | ||||||||||||||||||||
Mortgage(1) | 8 | 5 | 8 | 11 | 10 | |||||||||||||||
Construction(2) | 4 | 1 | — | 4 | 14 | |||||||||||||||
Personal | 280 | 228 | 209 | 177 | 142 | |||||||||||||||
Lease financing | 4 | 8 | 11 | 18 | 16 | |||||||||||||||
Other commercial and industrial | 83 | 75 | 171 | 178 | 301 | |||||||||||||||
Total Australia | 384 | 325 | 429 | 400 | 494 | |||||||||||||||
Overseas | ||||||||||||||||||||
Government and public authorities | — | 6 | — | 1 | — | |||||||||||||||
Agriculture, forestry and fishing | — | — | — | — | — | |||||||||||||||
Financial, investment and insurance | — | 1 | 16 | 58 | 6 | |||||||||||||||
Real estate | ||||||||||||||||||||
Mortgage(1) | 6 | 1 | 2 | 2 | 1 | |||||||||||||||
Construction(2) | — | — | — | — | — | |||||||||||||||
Personal | — | 7 | 7 | 6 | 38 | |||||||||||||||
Lease financing | — | — | — | — | — | |||||||||||||||
Other commercial and industrial | 1 | 14 | 1 | 35 | 102 | |||||||||||||||
Total Overseas | 7 | 29 | 26 | 102 | 147 | |||||||||||||||
Gross Bad Debts Written Off | 391 | 354 | 455 | 502 | 641 | |||||||||||||||
Bad Debts Recovered | ||||||||||||||||||||
Australia | 76 | 73 | 57 | 49 | 59 | |||||||||||||||
Overseas | 5 | 6 | 17 | 7 | 29 | |||||||||||||||
Bad Debts Recovered | 81 | 79 | 74 | 56 | 88 | |||||||||||||||
Net Bad Debts Written Off | 310 | 275 | 381 | 446 | 553 | |||||||||||||||
(1) | Principally owner occupied housing. | |
(2) | Primarily financing real estate and land development projects. |
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GROUP | ||||||||||||||||||||
Year Ended 30 June | ||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
Bad Debts Recovered | ||||||||||||||||||||
Australia | ||||||||||||||||||||
Government and public authorities | — | — | — | — | — | |||||||||||||||
Agriculture, forestry and fishing | 2 | 5 | 1 | 1 | — | |||||||||||||||
Financial, investment and insurance | 3 | 1 | 4 | — | 9 | |||||||||||||||
Real estate | ||||||||||||||||||||
Mortgage(1) | 1 | 1 | — | 1 | 1 | |||||||||||||||
Construction(2) | 1 | — | — | — | 1 | |||||||||||||||
Personal | 60 | 50 | 38 | 30 | 30 | |||||||||||||||
Lease financing | 1 | 3 | 2 | — | 1 | |||||||||||||||
Other commercial and industrial | 8 | 13 | 12 | 17 | 17 | |||||||||||||||
Total Australia | 76 | 73 | 57 | 49 | 59 | |||||||||||||||
Overseas | ||||||||||||||||||||
Government and public authorities | — | — | — | — | — | |||||||||||||||
Agriculture, forestry and fishing | — | — | — | — | — | |||||||||||||||
Financial, investment and insurance | — | 1 | 1 | 1 | — | |||||||||||||||
Real estate | ||||||||||||||||||||
Mortgage(1) | — | — | — | — | — | |||||||||||||||
Construction(2) | — | — | — | 3 | 1 | |||||||||||||||
Personal | 4 | 4 | 4 | — | 3 | |||||||||||||||
Lease financing | — | — | — | — | — | |||||||||||||||
Other commercial and industrial | 1 | 1 | 12 | 3 | 25 | |||||||||||||||
Total Overseas | 5 | 6 | 17 | 7 | 29 | |||||||||||||||
Bad Debts Recovered | 81 | 79 | 74 | 56 | 88 | |||||||||||||||
(1) | Principally owner occupied housing. | |
(2) | Primarily financing real estate and land development projects. |
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GROUP | ||||||||||||||||||||
At 30 June | ||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Industry | $M | $M | $M | $M | $M | |||||||||||||||
Australia | ||||||||||||||||||||
Government and public authorities | 7,122 | 5,672 | 5,810 | 5,955 | 6,012 | |||||||||||||||
Agriculture, forestry and fishing | 5,029 | 5,616 | 5,100 | 5,480 | 6,308 | |||||||||||||||
Financial, investment and insurance | 38,704 | 26,301 | 19,867 | 20,926 | 22,490 | |||||||||||||||
Real estate | ||||||||||||||||||||
Mortgage(1) | 124,095 | 110,209 | 91,956 | 85,032 | 73,800 | |||||||||||||||
Construction(2) | 2,211 | 3,619 | (4) | 2,722 | 3,837 | 4,547 | ||||||||||||||
Personal | 14,970 | 13,839 | (4) | 12,327 | 11,718 | 10,979 | ||||||||||||||
Lease financing | 5,055 | 4,963 | 5,264 | 5,425 | 6,628 | |||||||||||||||
Other commercial and industrial | 54,273 | 56,537 | (4) | 51,469 | 43,531 | 42,893 | ||||||||||||||
Total Australia | 251,459 | 226,756 | 194,515 | 181,904 | 173,657 | |||||||||||||||
Overseas | ||||||||||||||||||||
Government and public authorities | 1,385 | 2,307 | 1,709 | 1,390 | 385 | |||||||||||||||
Agriculture, forestry and fishing | 3,392 | 3,277 | 2,278 | 1,863 | 1,564 | |||||||||||||||
Financial, investment and insurance | 18,295 | 22,098 | 14,828 | 14,192 | 11,897 | |||||||||||||||
Real estate | ||||||||||||||||||||
Mortgage(1) | 21,747 | 17,722 | 13,428 | 10,735 | 8,085 | |||||||||||||||
Construction(2) | 346 | 258 | (4) | 210 | 185 | 198 | ||||||||||||||
Personal | 581 | 420 | 1,391 | 343 | 449 | |||||||||||||||
Lease financing | 195 | 175 | 197 | 256 | 146 | |||||||||||||||
Other commercial and industrial | 10,667 | 5,894 | (4) | 9,080 | 10,173 | 10,359 | ||||||||||||||
Total Overseas | 56,608 | 52,151 | 43,121 | 39,137 | 33,083 | |||||||||||||||
Total Gross Credit Risk | 308,067 | 278,907 | 237,636 | 221,041 | 206,740 | |||||||||||||||
Less Unearned Income | (1,562 | ) | (1,410 | ) | (1,310 | ) | (1,219 | ) | (1,343 | ) | ||||||||||
Total Credit Risk | 306,505 | 277,497 | 236,326 | 219,822 | 205,397 | |||||||||||||||
Charge for Bad and Doubtful Debts | 322 | 276 | 305 | 449 | 385 | |||||||||||||||
Loss Rate(3) | 0.11 | % | 0.10 | % | 0.13 | % | 0.20 | % | 0.19 | % |
(i) | Principally owner occupied housing. | |
(ii) | Primarily financing real estate and land development projects. | |
(iii) | The loss rate is the charge as a percentage of the credit risk. | |
(iv) | Certain of these loans have been reclassified consistent with prior years. |
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Loans | ||||||||||||||||||||||||||||
Advances | Bank | |||||||||||||||||||||||||||
Trading | Investment | and Other | Acceptances | Contingent | ||||||||||||||||||||||||
Securities | Securities | Receivables | of Customers | Liabilities | Derivatives | Total | ||||||||||||||||||||||
Industry | $M | $M | $M | $M | $M | $M | $M | |||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||
Government and public authorities | 788 | 2,278 | 3,000 | 10 | 819 | 227 | 7,122 | |||||||||||||||||||||
Agriculture, forestry and fishing | — | — | 3,213 | 1,741 | 40 | 35 | 5,029 | |||||||||||||||||||||
Financial, investment and insurance | 7,324 | 837 | 5,882 | 1,167 | 4,563 | 15,240 | 35,013 | |||||||||||||||||||||
Real estate | ||||||||||||||||||||||||||||
Mortgage(1) | — | — | 119,095 | — | 5,000 | — | 124,095 | |||||||||||||||||||||
Construction(2) | — | — | 1,694 | 274 | 216 | 27 | 2,211 | |||||||||||||||||||||
Personal | — | — | 14,504 | 380 | 84 | 2 | 14,970 | |||||||||||||||||||||
Lease financing | — | — | 5,055 | — | — | — | 5,055 | |||||||||||||||||||||
Other commercial and industrial | 2,911 | 1,456 | 31,201 | 13,214 | 3,341 | 2,150 | 54,273 | |||||||||||||||||||||
Total Australia | 11,023 | 4,571 | 183,644 | 16,786 | 14,063 | 17,681 | 247,768 | |||||||||||||||||||||
Overseas | ||||||||||||||||||||||||||||
Government and public authorities | 558 | 303 | 216 | — | 259 | 49 | 1,385 | |||||||||||||||||||||
Agriculture, forestry and fishing | — | — | 3,372 | — | 13 | 7 | 3,392 | |||||||||||||||||||||
Financial, investment and insurance | 1,798 | 2,122 | 7,027 | — | 1,512 | 3,277 | 15,736 | |||||||||||||||||||||
Real estate | ||||||||||||||||||||||||||||
Mortgage(1) | — | — | 20,765 | — | 982 | — | 21,747 | |||||||||||||||||||||
Construction(2) | — | — | 271 | — | 69 | 6 | 346 | |||||||||||||||||||||
Personal | — | — | 552 | — | 27 | 2 | 581 | |||||||||||||||||||||
Lease financing | — | — | 195 | — | — | — | 195 | |||||||||||||||||||||
Other commercial and industrial | 1,249 | 3,276 | 4,624 | — | 1,057 | 461 | 10,667 | |||||||||||||||||||||
Total Overseas | 3,605 | 5,701 | 37,022 | — | 3,919 | 3,802 | 54,049 | |||||||||||||||||||||
Gross Balances | 14,628 | 10,272 | 220,666 | 16,786 | 17,982 | 21,483 | 301,817 | |||||||||||||||||||||
Other Risk Concentrations Receivables due from other financial institutions | 6,205 | |||||||||||||||||||||||||||
Deposits with regulatory authorities | 45 | |||||||||||||||||||||||||||
Total Gross Credit Risk | 308,067 | |||||||||||||||||||||||||||
(1) | Principally owner occupied housing. | |
(2) | Primarily financing real estate and land development projects. |
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Loans | ||||||||||||||||||||||||||||
Advances | Bank | |||||||||||||||||||||||||||
Trading | Investment | and Other | Acceptances | Contingent | ||||||||||||||||||||||||
Securities | Securities | Receivables | of Customers | Liabilities | Derivatives | Total | ||||||||||||||||||||||
Industry | $M | $M | $M | $M | $M | $M | $M | |||||||||||||||||||||
Australia | ||||||||||||||||||||||||||||
Government and public authorities | 1,735 | 2,289 | 1,132 | 11 | 437 | 68 | 5,672 | |||||||||||||||||||||
Agriculture, forestry and fishing | — | — | 3,925 | 1,517 | 65 | 109 | 5,616 | |||||||||||||||||||||
Financial, investment and insurance | 6,664 | — | 3,693 | 684 | 1,186 | 9,160 | 21,387 | |||||||||||||||||||||
Real estate | — | |||||||||||||||||||||||||||
Mortgage(1) | — | — | 104,883 | — | 5,326 | — | 110,209 | |||||||||||||||||||||
Construction(2) | — | — | 2,626 | 302 | 642 | 49 | 3,619 | |||||||||||||||||||||
Personal | — | — | 13,389 | 333 | 116 | 1 | 13,839 | |||||||||||||||||||||
Lease financing | — | — | 4,963 | — | — | — | 4,963 | |||||||||||||||||||||
Other commercial and industrial | 2,911 | 1,533 | 27,167 | 12,172 | 5,956 | 6,798 | 56,537 | |||||||||||||||||||||
Total Australia | 11,310 | 3,822 | 161,778 | 15,019 | 13,728 | 16,185 | 221,842 | |||||||||||||||||||||
Overseas | ||||||||||||||||||||||||||||
Government and public authorities | 1,050 | 902 | 182 | — | 98 | 37 | 2,269 | |||||||||||||||||||||
Agriculture, forestry and fishing | — | — | 3,277 | — | — | — | 3,277 | |||||||||||||||||||||
Financial, investment and insurance | 2,058 | 5,592 | 5,857 | — | 1,733 | 3,403 | 18,643 | |||||||||||||||||||||
Real estate | ||||||||||||||||||||||||||||
Mortgage(1) | — | — | 16,967 | — | 755 | — | 17,722 | |||||||||||||||||||||
Construction(2) | — | — | 257 | — | 1 | — | 258 | |||||||||||||||||||||
Personal | — | — | 415 | — | 2 | 3 | 420 | |||||||||||||||||||||
Lease financing | — | — | 175 | — | — | — | 175 | |||||||||||||||||||||
Other commercial and industrial | 478 | 1,131 | 3,487 | — | 551 | 247 | 5,894 | |||||||||||||||||||||
Total Overseas | 3,586 | 7,625 | 30,617 | — | 3,140 | 3,690 | 48,658 | |||||||||||||||||||||
Gross Balances | 14,896 | 11,447 | 192,395 | 15,019 | 16,868 | 19,875 | 270,500 | |||||||||||||||||||||
Other Risk Concentrations Receivables due from other financial institutions | 8,369 | |||||||||||||||||||||||||||
Deposits with regulatory authorities | 38 | |||||||||||||||||||||||||||
Total Gross Credit Risk | 278,907 | |||||||||||||||||||||||||||
(1) | Principally owner occupied housing. | |
(2) | Primarily financing real estate and land development projects. |
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Total | Impaired | Provisions for | Net | |||||||||||||||||||||
Risk | Assets | Impairment | Write-offs | Recoveries | Write-offs | |||||||||||||||||||
Industry | $M | $M | $M | $M | $M | $M | ||||||||||||||||||
Australia | ||||||||||||||||||||||||
Government and public authorities | 7,122 | — | — | — | — | — | ||||||||||||||||||
Agriculture, forestry and fishing | 5,029 | 76 | 16 | 1 | (2 | ) | (1 | ) | ||||||||||||||||
Financial, investment and insurance | 35,013 | 6 | 1 | 4 | (3 | ) | 1 | |||||||||||||||||
Real estate | ||||||||||||||||||||||||
Mortgage(1) | 124,095 | — | 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 | 54,273 | 243 | 49 | 83 | (8 | ) | 75 | |||||||||||||||||
Total Australia | 247,768 | 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 | 301,817 | 391 | 157 | 391 | (81 | ) | 310 | |||||||||||||||||
Receivables due from other financial institutions | 6,205 | |||||||||||||||||||||||
Deposits with regulatory authorities | 45 | |||||||||||||||||||||||
Total Gross Credit Risk | 308,067 | |||||||||||||||||||||||
(1) | Principally owner occupied housing. | |
(2) | Primarily financing real estate and land development projects. |
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Total | Impaired | Provisions for | Net | |||||||||||||||||||||
Risk | Assets | Impairment | Write-offs | Recoveries | Write-offs | |||||||||||||||||||
Industry | $M | $M | $M | $M | $M | $M | ||||||||||||||||||
Australia | ||||||||||||||||||||||||
Government and public authorities | 5,672 | — | — | — | — | — | ||||||||||||||||||
Agriculture, forestry and fishing | 5,616 | 19 | 2 | 2 | (5 | ) | (3 | ) | ||||||||||||||||
Financial, investment and insurance | 21,387 | 6 | 1 | 6 | (1 | ) | 5 | |||||||||||||||||
Real estate | ||||||||||||||||||||||||
Mortgage(1) | 110,209 | — | 6 | 5 | (1 | ) | 4 | |||||||||||||||||
Construction(2) | 3,619 | 15 | 4 | 1 | — | 1 | ||||||||||||||||||
Personal | 13,839 | 6 | 38 | 228 | (50 | ) | 178 | |||||||||||||||||
Lease financing | 4,963 | 5 | 3 | 8 | (3 | ) | 5 | |||||||||||||||||
Other commercial and industrial | 56,537 | 294 | 74 | 75 | (13 | ) | 62 | |||||||||||||||||
Total Australia | 221,842 | 345 | 128 | 325 | (73 | ) | 252 | |||||||||||||||||
Overseas | ||||||||||||||||||||||||
Government and public authorities | 2,269 | — | — | 6 | — | 6 | ||||||||||||||||||
Agriculture, forestry and fishing | 3,277 | — | — | — | — | — | ||||||||||||||||||
Financial, investment and insurance | 18,643 | 5 | — | 1 | (1 | ) | — | |||||||||||||||||
Real estate | ||||||||||||||||||||||||
Mortgage(1) | 17,722 | 11 | 6 | 1 | — | 1 | ||||||||||||||||||
Construction(2) | 258 | — | — | — | — | — | ||||||||||||||||||
Personal | 420 | 1 | 8 | 7 | (4 | ) | 3 | |||||||||||||||||
Lease financing | 175 | — | — | — | — | — | ||||||||||||||||||
Other commercial and industrial | 5,894 | 1 | 1 | 14 | (1 | ) | 13 | |||||||||||||||||
Total Overseas | 48,658 | 18 | 15 | 29 | (6 | ) | 23 | |||||||||||||||||
Gross Balances | 270,500 | 363 | 143 | 354 | (79 | ) | 275 | |||||||||||||||||
Receivables due from other financial institutions | 8,369 | |||||||||||||||||||||||
Deposits with regulatory authorities | 38 | |||||||||||||||||||||||
Total Gross Credit Risk | 278,907 | |||||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Number | Number | Number | Number | Number | ||||||||||||||||
10% to less than 15% of Group’s capital resources | — | — | — | — | — | |||||||||||||||
5% to less than 10% of Group’s capital resources | 1 | 1 | — | 1 | 2 |
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At 30 June | ||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Industry | $M | $M | $M | $M | $M | |||||||||||||||
Australia | ||||||||||||||||||||
Government and public authorities | 3,000 | 1,132 | 1,505 | 2,466 | 1,655 | |||||||||||||||
Agriculture, forestry and fishing | 3,213 | 3,925 | 3,677 | 3,893 | 4,734 | |||||||||||||||
Financial, investment and insurance | 5,882 | 3,693 | 2,024 | 1,435 | 4,670 | |||||||||||||||
Real estate | ||||||||||||||||||||
Mortgage(1) | 119,095 | 104,883 | 87,592 | 75,394 | 65,466 | |||||||||||||||
Construction(2),(3) | 1,694 | 2,626 | 1,701 | 2,182 | 2,548 | |||||||||||||||
Personal(3) | 14,504 | 13,389 | 11,972 | 11,488 | 10,576 | |||||||||||||||
Lease financing | 5,055 | 4,963 | 5,264 | 5,425 | 6,628 | |||||||||||||||
Other commercial and industrial | 31,201 | 27,167 | 26,449 | 26,866 | 25,782 | |||||||||||||||
Total Australia | 183,644 | 161,778 | 140,184 | 129,149 | 122,059 | |||||||||||||||
Overseas | ||||||||||||||||||||
Government and public authorities | 216 | 182 | 222 | 204 | 165 | |||||||||||||||
Agriculture, forestry and fishing | 3,372 | 3,277 | 2,278 | 1,863 | 1,258 | |||||||||||||||
Financial, investment and insurance | 7,027 | 5,857 | 3,210 | 3,035 | 2,824 | |||||||||||||||
Real estate | ||||||||||||||||||||
Mortgage(1) | 20,765 | 16,967 | 12,611 | 10,444 | 8,045 | |||||||||||||||
Construction(2) | 271 | 257 | 209 | 185 | 177 | |||||||||||||||
Personal | 552 | 415 | 1,391 | 337 | 440 | |||||||||||||||
Lease financing | 195 | 175 | 197 | 256 | 146 | |||||||||||||||
Other commercial and industrial | 4,624 | 3,487 | 2,959 | 4,573 | 4,081 | |||||||||||||||
Total Overseas | 37,022 | 30,617 | 23,077 | 20,897 | 17,136 | |||||||||||||||
Gross Loans, Advances and Other Receivables | 220,666 | 192,395 | 163,261 | 150,046 | 139,195 | |||||||||||||||
Provisions for bad and doubtful debts, unearned income, interest reserved and unearned tax remissions on leverage leases | (3,150 | ) | (3,004 | ) | (2,914 | ) | (2,972 | ) | (3,136 | ) | ||||||||||
Net Loans, Advances and Other Receivables | 217,516 | 189,391 | 160,347 | 147,074 | 136,059 | |||||||||||||||
(1) | Principally owner occupied housing. | |
(2) | Primarily financing real estate and land development projects. | |
(3) | Certain of these loans for the 2004 year have been reclassified consistent with prior years. |
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(a) | Non accruals, comprising: |
(b) | Restructured Facilities, comprising: |
(c) | Assets Acquired Through Security Enforcement (AATSE), comprising: |
GROUP | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
% | % | % | ||||||||||
Impaired Asset Ratios | ||||||||||||
Gross impaired assets net of interest reserved as % of risk weighted assets | 0.20 | 0.20 | 0.44 | |||||||||
Net impaired assets as % of: | ||||||||||||
Risk weighted assets | 0.12 | 0.12 | 0.30 | |||||||||
Total shareholders’ equity | 0.82 | 0.79 | 1.96 |
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GROUP | ||||||||||||||||||||
At 30 June | ||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
Australia | ||||||||||||||||||||
Non-accrual loans: | ||||||||||||||||||||
Gross balances | 381 | 345 | 545 | 732 | 518 | |||||||||||||||
Less interest reserved | (19 | ) | (23 | ) | (25 | ) | (54 | ) | (63 | ) | ||||||||||
Gross balance (net of interest reserved) | 362 | 322 | 520 | 678 | 455 | |||||||||||||||
Less provisions for impairment | (144 | ) | (128 | ) | (163 | ) | (221 | ) | (154 | ) | ||||||||||
Net Non-Accrual Loans | 218 | 194 | 357 | 457 | 301 | |||||||||||||||
Restructured loans: | ||||||||||||||||||||
Gross balances | — | — | — | — | 1 | |||||||||||||||
Less interest reserved | — | — | — | — | — | |||||||||||||||
Gross balance (net of interest reserved) | — | — | — | — | 1 | |||||||||||||||
Less specific provisions | — | — | — | — | — | |||||||||||||||
Net Restructured Loans | — | — | — | — | 1 | |||||||||||||||
Assets Acquired Through Security Enforcement (AATSE): | ||||||||||||||||||||
Gross balances | — | — | — | — | — | |||||||||||||||
Less provisions for impairment | — | — | — | — | — | |||||||||||||||
Net AATSE | — | — | — | — | — | |||||||||||||||
Net Australian Impaired Assets | 218 | 194 | 357 | 457 | 302 | |||||||||||||||
Overseas | ||||||||||||||||||||
Non-accrual loans: | ||||||||||||||||||||
Gross balances | 14 | 18 | 120 | 211 | 197 | |||||||||||||||
Less interest reserved | — | — | (1 | ) | (5 | ) | (5 | ) | ||||||||||||
Gross balance (net of interest reserved) | 14 | 18 | 119 | 206 | 192 | |||||||||||||||
Less provisions for impairment | (13 | ) | (15 | ) | (42 | ) | (49 | ) | (79 | ) | ||||||||||
Net Non-Accrual Loans | 1 | 3 | 77 | 157 | 113 | |||||||||||||||
Restructured loans: | ||||||||||||||||||||
Gross balances | — | — | — | — | — | |||||||||||||||
Less interest reserved | — | — | — | — | — | |||||||||||||||
Gross balance (net of interest reserved) | — | — | — | — | — | |||||||||||||||
Less specific provisions | — | — | — | — | — | |||||||||||||||
Net Restructured Loans | — | — | — | — | — | |||||||||||||||
Asset Acquired Through Security Enforcement (AATSE) | — | — | — | — | 1 | |||||||||||||||
Less provisions for impairment | — | — | — | — | (1 | ) | ||||||||||||||
Net AATSE | — | — | — | — | — | |||||||||||||||
Net overseas impaired assets | 1 | 3 | 77 | 157 | 113 | |||||||||||||||
Total Net Impaired Assets | 219 | 197 | 434 | 614 | 415 | |||||||||||||||
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GROUP | ||||||||||||||||||||
Year Ended 30 June | ||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Gross Impaired Assets | $M | $M | $M | $M | $M | |||||||||||||||
Gross impaired assets at period beginning | 363 | 665 | 943 | 717 | 1,135 | |||||||||||||||
New and increased | 769 | 532 | 617 | 1,069 | 707 | |||||||||||||||
Balances written off | (350 | ) | (278 | ) | (456 | ) | (481 | ) | (666 | ) | ||||||||||
Returned to performing or repaid | (387 | ) | (556 | ) | (439 | ) | (362 | ) | (459 | ) | ||||||||||
Gross Impaired Assets at Period End | 395 | 363 | 665 | 943 | 717 | |||||||||||||||
GROUP | ||||||||||||||||||||
At 30 June | ||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Loans Accruing But Past Due 90 Days or More | $M | $M | $M | $M | $M | |||||||||||||||
Accruing loans past due 90 days or more | ||||||||||||||||||||
Housing loans | 183 | 168 | 157 | 176 | 218 | |||||||||||||||
Other loans | 119 | 78 | 91 | 73 | 90 | |||||||||||||||
Total | 302 | 246 | 248 | 249 | 308 | |||||||||||||||
GROUP | ||||||||||||||||||||
Year Ended 30 June | ||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Net Interest Foregone on Impaired Assets | $M | $M | $M | $M | $M | |||||||||||||||
Interest income forgone | ||||||||||||||||||||
Australia non accrual facilities | 13 | 10 | 15 | 21 | 8 | |||||||||||||||
Overseas non accrual facilities | — | — | 3 | 7 | 8 | |||||||||||||||
Total | 13 | 10 | 18 | 28 | 16 | |||||||||||||||
GROUP | ||||||||||||||||||||
Year Ended 30 June | ||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Interest Taken to Profit on Impaired Assets | $M | $M | $M | $M | $M | |||||||||||||||
Australia | ||||||||||||||||||||
Non accrual facilities | 9 | 11 | 26 | 27 | 37 | |||||||||||||||
Restructured facilities | — | — | — | — | — | |||||||||||||||
Overseas | ||||||||||||||||||||
Non accrual facilities | — | 3 | 4 | 3 | 14 | |||||||||||||||
OREO | — | — | — | — | — | |||||||||||||||
Total Interest Taken to Profit | 9 | 14 | 30 | 30 | 51 | |||||||||||||||
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GROUP | GROUP | |||||||||||||||||||||||
Australia | Overseas | Total | Australia | Overseas | Total | |||||||||||||||||||
2005 | 2005 | 2005 | 2004 | 2004 | 2004 | |||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Non Accrual Loans | ||||||||||||||||||||||||
With provisions | 235 | 14 | 249 | 193 | 13 | 206 | ||||||||||||||||||
Without provisions | 146 | — | 146 | 152 | 5 | 157 | ||||||||||||||||||
Gross Balances | 381 | 14 | 395 | 345 | 18 | 363 | ||||||||||||||||||
Less interest reserved | (19 | ) | — | (19 | ) | (23 | ) | — | (23 | ) | ||||||||||||||
Net Balances | 362 | 14 | 376 | 322 | 18 | 340 | ||||||||||||||||||
Less provisions for impairment | (144 | ) | (13 | ) | (157 | ) | (128 | ) | (15 | ) | (143 | ) | ||||||||||||
Net Non Accrual Loans | 218 | 1 | 219 | 194 | 3 | 197 | ||||||||||||||||||
Restructured Loans | ||||||||||||||||||||||||
Gross balances | — | — | — | — | — | — | ||||||||||||||||||
Less interest reserved | — | — | — | — | — | — | ||||||||||||||||||
Net balances | — | — | — | — | — | — | ||||||||||||||||||
Less provisions for impairment | — | — | — | — | — | — | ||||||||||||||||||
Net Restructured Loans | — | — | — | — | — | — | ||||||||||||||||||
Other Real Estate Owned (OREO) | — | — | — | — | ||||||||||||||||||||
Gross balances | — | — | — | — | — | — | ||||||||||||||||||
Less provisions for impairment | — | — | — | — | — | — | ||||||||||||||||||
Net OREO | — | — | — | — | — | — | ||||||||||||||||||
Other Assets Acquired Through Security Enforcement (OAATSE) | ||||||||||||||||||||||||
Gross balances | — | — | — | — | — | — | ||||||||||||||||||
Less provisions for impairment | — | — | — | — | — | — | ||||||||||||||||||
Net OAATSE | — | — | — | — | — | — | ||||||||||||||||||
Total Impaired Assets | ||||||||||||||||||||||||
Gross balances | 381 | 14 | 395 | 345 | 18 | 363 | ||||||||||||||||||
Less interest reserved | (19 | ) | — | (19 | ) | (23 | ) | — | (23 | ) | ||||||||||||||
Net balances | 362 | 14 | 376 | 322 | 18 | 340 | ||||||||||||||||||
Less provisions for impairment | (144 | ) | (13 | ) | (157 | ) | (128 | ) | (15 | ) | (143 | ) | ||||||||||||
Net Impaired Assets | 218 | 1 | 219 | 194 | 3 | 197 | ||||||||||||||||||
Non Accrual Loans by Size of Loan | ||||||||||||||||||||||||
Less than $1 million | 119 | 13 | 132 | 108 | 13 | 121 | ||||||||||||||||||
$1 million to $10 million | 116 | 1 | 117 | 114 | 5 | 119 | ||||||||||||||||||
Greater than $10 million | 146 | — | 146 | 123 | — | 123 | ||||||||||||||||||
Total | 381 | 14 | 395 | 345 | 18 | 363 | ||||||||||||||||||
Accruing Loans 90 days past due or more(1) | 267 | 35 | 302 | 224 | 22 | 246 |
(1) | These are loans that are well secured and not classified as impaired assets but which are in arrears 90 days or more. Interest on these loans continues to be taken to profit. |
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GROUP | ||||||||||||||||||||||||||||
2005 | 2004 | |||||||||||||||||||||||||||
Corporate/ | CUSTOMER TYPE | Project | Total | Total | ||||||||||||||||||||||||
Finance | Multinational | Government | Finance(1) | APL/NZPL | Exposure(2) | Exposure | ||||||||||||||||||||||
Country | $M | $M | $M | $M | $M | $M | $M | |||||||||||||||||||||
China | 335 | 6 | — | — | — | 341 | 177 | |||||||||||||||||||||
Hong Kong | 492 | 984 | — | — | 217 | 1,693 | 1,492 | |||||||||||||||||||||
827 | 990 | — | — | 217 | 2,034 | 1,669 | ||||||||||||||||||||||
Japan | 710 | 78 | 30 | — | 6 | 824 | 546 | |||||||||||||||||||||
Malaysia | 65 | 67 | 49 | — | 1 | 182 | 380 | |||||||||||||||||||||
Singapore | 584 | 127 | 9 | — | 33 | 753 | 880 | |||||||||||||||||||||
Philippines | 328 | 2 | — | — | — | 330 | 641 | |||||||||||||||||||||
Taiwan | 621 | 1 | — | — | �� | — | 622 | 314 | ||||||||||||||||||||
Other | 6 | 35 | — | — | — | 41 | 3 | |||||||||||||||||||||
2,314 | 310 | 88 | — | 40 | 2,652 | 2,764 | ||||||||||||||||||||||
Indonesia | 23 | 5 | 23 | 23 | 6 | 80 | 246 | |||||||||||||||||||||
South Korea | 359 | 102 | 112 | — | — | 573 | 985 | |||||||||||||||||||||
Thailand | 229 | 26 | 1 | — | — | 256 | 220 | |||||||||||||||||||||
611 | 133 | 136 | 23 | 6 | 909 | 1,451 | ||||||||||||||||||||||
Total | 3,752 | 1,433 | 224 | 23 | 263 | 5,695 | 5,884 | |||||||||||||||||||||
GROUP | ||||||||||||||||||||||||||||
2005 | 2004 | |||||||||||||||||||||||||||
Corporate/ | CUSTOMER TYPE | Project | Total | Total | ||||||||||||||||||||||||
Finance | Multinational | Government | Finance(1) | APL/NZPL | Exposure(2) | Exposure | ||||||||||||||||||||||
Region | $M | $M | $M | $M | $M | $M | $M | |||||||||||||||||||||
Eastern Europe | 1 | 1 | — | — | — | 2 | 1 | |||||||||||||||||||||
Latin America | — | — | — | — | — | — | — | |||||||||||||||||||||
Middle East | 398 | 8 | — | — | — | 406 | 73 | |||||||||||||||||||||
(1) | Project Finance — Long term lending for large scale projects (such as mining and infrastructure) where repayment is primarily reliant on the cash flow from the project. | |
(2) | Total Exposure — The maximum of the limit or balance utilised for committed facilities, whichever is highest, and the balance utilised for uncommitted facilities. For derivative facilities, balances are reported on a ‘mark to market’ plus potential exposure basis. |
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GROUP | ||||||||
2005 | 2004 | |||||||
$M | $M | |||||||
Equity Security Investments | ||||||||
Direct | 3,144 | 4,433 | ||||||
Indirect | 6,467 | 8,025 | ||||||
9,611 | 12,458 | |||||||
Debt Security Investments | ||||||||
Direct | 3,918 | 3,518 | ||||||
Indirect | 8,116 | 7,710 | ||||||
12,034 | 11,228 | |||||||
Property Investments | ||||||||
Direct | 3 | 80 | ||||||
Indirect | 2,442 | 2,330 | ||||||
2,445 | 2,410 | |||||||
Other Assets | 3,747 | 2,846 | ||||||
Total Life Insurance Investment Assets | 27,837 | 28,942 | ||||||
�� | GROUP | BANK | ||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Central Banks Overseas | 45 | 38 | 1 | 4 | ||||||||||||
Total Deposits with Regulatory Authorities | 45 | 38 | 1 | 4 | ||||||||||||
GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Shares in controlled entities | — | — | 17,634 | 12,156 | ||||||||||||
Loans to controlled entities | — | — | 11,527 | 11,521 | ||||||||||||
Total Shares in and Loans to Controlled Entities | — | — | 29,161 | 23,677 | ||||||||||||
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GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
(a) Land and Buildings | ||||||||||||||||
Land | ||||||||||||||||
At 30 June 2005 valuation | 170 | — | 155 | — | ||||||||||||
At 30 June 2004 valuation | — | 160 | — | 148 | ||||||||||||
Closing balance | 170 | 160 | 155 | 148 | ||||||||||||
Buildings | ||||||||||||||||
At 30 June 2005 valuation | 262 | — | 243 | — | ||||||||||||
At 30 June 2004 valuation | — | 253 | — | 231 | ||||||||||||
Closing balance | 262 | 253 | 243 | 231 | ||||||||||||
Total Land and Buildings | 432 | 413 | 398 | 379 | ||||||||||||
(b) Leasehold Improvements | ||||||||||||||||
At cost | 702 | 657 | 582 | 545 | ||||||||||||
Provision for depreciation | (409 | ) | (376 | ) | (337 | ) | (310 | ) | ||||||||
Closing balance | 293 | 281 | 245 | 235 | ||||||||||||
(c) Equipment | ||||||||||||||||
At cost | 723 | 639 | 406 | 333 | ||||||||||||
Provision for depreciation | (486 | ) | (448 | ) | (253 | ) | (225 | ) | ||||||||
Closing balance | 237 | 191 | 153 | 108 | ||||||||||||
(d) Assets Under Lease | ||||||||||||||||
At cost | 138 | 67 | — | — | ||||||||||||
Provision for depreciation | (8 | ) | — | — | — | |||||||||||
Closing balance | 130 | 67 | — | — | ||||||||||||
(e) Investment Property(1) | ||||||||||||||||
At cost | 252 | 252 | — | — | ||||||||||||
Total Property, Plant and Equipment | 1,344 | 1,204 | 796 | 722 | ||||||||||||
(1) | This investment represents a 50% interest in a long term freehold lease over property. |
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GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Reconciliation | $M | $M | $M | $M | ||||||||||||
Land | ||||||||||||||||
Opening balance | 160 | 141 | 148 | 129 | ||||||||||||
Disposals | (6 | ) | (8 | ) | (6 | ) | (3 | ) | ||||||||
Net revaluations | 16 | 27 | 13 | 22 | ||||||||||||
Closing balance | 170 | 160 | 155 | 148 | ||||||||||||
Buildings | ||||||||||||||||
Opening balance | 253 | 302 | 231 | 233 | ||||||||||||
Acquisitions | 22 | 2 | 22 | — | ||||||||||||
Disposals | (9 | ) | (57 | ) | (10 | ) | (5 | ) | ||||||||
Revaluation | 17 | 27 | 20 | 21 | ||||||||||||
Depreciation | (21 | ) | (21 | ) | (20 | ) | (18 | ) | ||||||||
Closing balance | 262 | 253 | 243 | 231 | ||||||||||||
Leasehold Improvements | ||||||||||||||||
Opening balance | 281 | 228 | 235 | 175 | ||||||||||||
Acquisitions | 78 | 119 | 62 | 117 | ||||||||||||
Disposals | (8 | ) | (11 | ) | (6 | ) | (12 | ) | ||||||||
Depreciation | (58 | ) | (55 | ) | (46 | ) | (45 | ) | ||||||||
Closing balance | 293 | 281 | 245 | 235 | ||||||||||||
Equipment | ||||||||||||||||
Opening balance | 191 | 150 | 108 | 71 | ||||||||||||
Acquisitions | 115 | 96 | 80 | 58 | ||||||||||||
Disposals | — | (4 | ) | — | — | |||||||||||
Depreciation | (69 | ) | (51 | ) | (35 | ) | (21 | ) | ||||||||
Closing balance | 237 | 191 | 153 | 108 | ||||||||||||
Assets Under Lease | ||||||||||||||||
Opening balance | 67 | — | — | — | ||||||||||||
Acquisitions | 71 | 67 | — | — | ||||||||||||
Depreciation | (8 | ) | — | — | — | |||||||||||
Closing balance | 130 | 67 | — | — | ||||||||||||
Investment Property | ||||||||||||||||
Opening balance | 252 | — | — | — | ||||||||||||
Acquisitions | — | 252 | — | — | ||||||||||||
Closing balance | 252 | 252 | — | — | ||||||||||||
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GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Purchased goodwill — Colonial | 5,591 | 5,591 | 2,671 | 2,671 | ||||||||||||
Purchased goodwill — Other | 1,169 | 1,155 | 835 | 835 | ||||||||||||
Realisation of life insurance synergy benefits | (332 | ) | (332 | ) | — | — | ||||||||||
Accumulated amortisation | (2,034 | ) | (1,709 | ) | (1,170 | ) | (984 | ) | ||||||||
Total Intangibles | 4,394 | 4,705 | 2,336 | 2,522 | ||||||||||||
2005 | 2004 | |||||||
Segment | $M | $M | ||||||
Banking(1) | 4,090 | 4,379 | ||||||
Funds Management(2) | 236 | 253 | ||||||
Insurance(2) | 68 | 73 | ||||||
Total | 4,394 | 4,705 | ||||||
(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 relates to the goodwill on acquisition of Colonial. |
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GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Accrued interest receivable | 1,197 | 1,208 | 1,503 | 1,247 | ||||||||||||
Shares in other companies | 267 | 223 | 133 | 80 | ||||||||||||
Accrued fees/reimbursements receivable | 641 | 600 | 507 | 602 | ||||||||||||
Securities sold not delivered | 907 | 1,540 | 625 | 1,347 | ||||||||||||
Future income tax benefits | 650 | 564 | 577 | 423 | ||||||||||||
Excess of net market value over net assets of life insurance controlled entities | 6,549 | 5,741 | — | — | ||||||||||||
Excess related to outside equity interests(1) | 111 | 111 | — | — | ||||||||||||
Unrealised gains on trading derivatives (Note 39) | 12,144 | 12,827 | 12,043 | 12,798 | ||||||||||||
Intergroup current tax receivable | — | — | 55 | 104 | ||||||||||||
Intergroup deferred tax receivable | — | — | 549 | 317 | ||||||||||||
Other | 1,775 | 2,478 | 1,208 | 1,931 | ||||||||||||
Total Other Assets | 24,241 | 25,292 | 17,200 | 18,849 | ||||||||||||
1. | (1) | This is an outside equity interest in a funds management business acquired during 2003, and is not included in the revaluation in Note 34 Life Insurance Business. |
2. |
§ | Capital losses arising under the tax consolidations system; and | |
§ | Tax loses and timing differences in offshore centres, have not been recognised as assets because recovery is not virtually certain. |
§ | $44 million (2004: $34 million) in capital losses; and | |
§ | $115 million (2004: $136 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 the deductions for the losses. |
GROUP | ||||||||||||
At 30 June 2005 | ||||||||||||
Excess of | ||||||||||||
Market | Net | Market Value | ||||||||||
Value | Assets | Over Net Assets | ||||||||||
$M | $M | $M | ||||||||||
Commonwealth and Colonial entities | 7,944 | 2,104 | 5,840 | |||||||||
ASB entities | 1,118 | 409 | 709 | |||||||||
9,062 | 2,513 | 6,549 | ||||||||||
GROUP | ||||||||||||
At 30 June 2004 | ||||||||||||
Excess of | ||||||||||||
Market | Net | Market Value | ||||||||||
Value | Assets | Over Net Assets | ||||||||||
$M | $M | $M | ||||||||||
Commonwealth and Colonial entities | 7,424 | 2,246 | 5,178 | |||||||||
ASB entities | 978 | 415 | 563 | |||||||||
8,402 | 2,661 | 5,741 | ||||||||||
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GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Australia | ||||||||||||||||
Certificates of deposit | 16,041 | 20,516 | 16,041 | 20,516 | ||||||||||||
Term deposits | 41,582 | 38,530 | 39,993 | 36,714 | ||||||||||||
On demand and short term deposits | 75,410 | 71,115 | 75,806 | 71,289 | ||||||||||||
Deposits not bearing interest | 5,823 | 5,407 | 5,853 | 5,431 | ||||||||||||
Securities sold under agreements to repurchase and short sales | 2,258 | 3,585 | 2,258 | 3,648 | ||||||||||||
Total Australia | 141,114 | 139,153 | 139,951 | 137,598 | ||||||||||||
Overseas | ||||||||||||||||
Certificates of deposit | 3,105 | 3,716 | 386 | 1,906 | ||||||||||||
Term deposits | 13,617 | 11,724 | 2,998 | 2,448 | ||||||||||||
On demand and short term deposits | 8,633 | 6,852 | 113 | 73 | ||||||||||||
Deposits not bearing interest | 1,155 | 1,174 | 5 | 11 | ||||||||||||
Securities sold under agreements to repurchase and short sales | 405 | 558 | 405 | 433 | ||||||||||||
Total Overseas | 26,915 | 24,024 | 3,907 | 4,871 | ||||||||||||
Total Deposits and Other Public Borrowings | 168,029 | 163,177 | 143,858 | 142,469 | ||||||||||||
GROUP | ||||||||||||||||||||
At 30 June 2005 | ||||||||||||||||||||
Maturing | ||||||||||||||||||||
Maturing | Maturing | Between | Maturing | |||||||||||||||||
Three | Between | Six & | After | |||||||||||||||||
Months or | Three & Six | Twelve | Twelve | |||||||||||||||||
Less | Months | Months | Months | Total | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
Australia | ||||||||||||||||||||
Certificates of deposit(1) | 7,912 | 5,078 | 1,427 | 1,624 | 16,041 | |||||||||||||||
Time deposits | 20,075 | 14,527 | 4,665 | 2,315 | 41,582 | |||||||||||||||
Total Australia | 27,987 | 19,605 | 6,092 | 3,939 | 57,623 | |||||||||||||||
Overseas | ||||||||||||||||||||
Certificates of deposit(1) | 2,355 | 373 | 321 | 56 | 3,105 | |||||||||||||||
Time deposits | 9,632 | 2,795 | 772 | 418 | 13,617 | |||||||||||||||
Total Overseas | 11,987 | 3,168 | 1,093 | 474 | 16,722 | |||||||||||||||
Total Certificates of Deposit and Time Deposits | 39,974 | 22,773 | 7,185 | 4,413 | 74,345 | |||||||||||||||
3. | (1) All certificates of deposit issued by the Bank are for amounts greater than $100,000. |
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GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Australia | 2,708 | 2,383 | 2,712 | 2,383 | ||||||||||||
Overseas | 5,315 | 4,258 | 5,257 | 4,228 | ||||||||||||
Total Payables to Other Financial Institutions | 8,023 | 6,641 | 7,969 | 6,611 | ||||||||||||
GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $ | |||||||||||||
Australia | ||||||||||||||||
Provision for income tax | 808 | 402 | 757 | 352 | ||||||||||||
Provision for deferred income tax | 657 | 355 | 657 | 332 | ||||||||||||
Total Australia | 1,465 | 757 | 1,414 | 684 | ||||||||||||
Overseas | ||||||||||||||||
Provision for income tax | 25 | 25 | 7 | 6 | ||||||||||||
Provision for deferred income tax | 60 | 29 | — | — | ||||||||||||
Total Overseas | 85 | 54 | 7 | 6 | ||||||||||||
Total Income Tax Liability | 1,550 | 811 | 1,421 | 690 | ||||||||||||
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GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Provision for: | ||||||||||||||||
Long service leave | 296 | 300 | 285 | 293 | ||||||||||||
Annual leave | 146 | 130 | 126 | 112 | ||||||||||||
Other employee entitlements | 82 | 98 | 82 | 98 | ||||||||||||
Which new Bank costs | 91 | 208 | 91 | 208 | ||||||||||||
Restructuring costs | 18 | — | 18 | — | ||||||||||||
General insurance claims | 100 | 79 | — | — | ||||||||||||
Self insurance/non lending losses | 66 | 60 | 66 | 59 | ||||||||||||
Other | 82 | 122 | 41 | 49 | ||||||||||||
Total Other Provisions | 881 | 997 | 709 | 819 | ||||||||||||
GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Which new Bank costs: | ||||||||||||||||
Opening balance | 208 | — | 208 | — | ||||||||||||
Additional provision | — | 208 | — | 208 | ||||||||||||
Transfers | (20 | ) | — | (20 | ) | — | ||||||||||
Amounts utilised during the year | (97 | ) | — | (97 | ) | — | ||||||||||
Closing balance | 91 | 208 | 91 | 208 | ||||||||||||
Restructuring costs: | ||||||||||||||||
Opening balance | — | 30 | — | 29 | ||||||||||||
Additional provision | 22 | — | 22 | — | ||||||||||||
Amounts utilised during the year | (4 | ) | (30 | ) | (4 | ) | (29 | ) | ||||||||
Closing balance | 18 | — | 18 | — | ||||||||||||
General insurance claims: | ||||||||||||||||
Opening balance | 79 | 66 | — | — | ||||||||||||
Additional provision | 61 | 44 | — | — | ||||||||||||
Amounts utilised during the year | (40 | ) | (31 | ) | — | — | ||||||||||
Closing balance | 100 | 79 | — | — | ||||||||||||
Self insurance/non lending losses: | ||||||||||||||||
Opening balance | 60 | 56 | 59 | 55 | ||||||||||||
Additional provision | 34 | 13 | 34 | 13 | ||||||||||||
Amounts utilised during the year | (28 | ) | (9 | ) | (27 | ) | (9 | ) | ||||||||
Closing balance | 66 | 60 | 66 | 59 | ||||||||||||
Other: | ||||||||||||||||
Opening balance | 122 | 107 | 49 | 63 | ||||||||||||
Additional provision | 29 | 70 | 24 | 6 | ||||||||||||
Amounts utilised during the year | (69 | ) | (54 | ) | (32 | ) | (20 | ) | ||||||||
Foreign exchange translation adjustment | — | (1 | ) | — | — | |||||||||||
Closing balance | 82 | 122 | 41 | 49 | ||||||||||||
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GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Short term debt issues | 26,344 | 20,401 | 9,500 | 6,127 | ||||||||||||
Long term debt issues | 32,277 | 23,641 | 31,187 | 18,322 | ||||||||||||
Total Debt Issues | 58,621 | 44,042 | 40,687 | 24,449 | ||||||||||||
Short Term Debt Issues | ||||||||||||||||
AUD Promissory Notes | 1,214 | 1,450 | — | — | ||||||||||||
AUD Bank Bills | 624 | 490 | — | — | ||||||||||||
US Commercial Paper | 10,141 | 9,381 | — | — | ||||||||||||
Euro Commercial Paper | 4,976 | 3,638 | 3,065 | 2,498 | ||||||||||||
Long Term Debt Issues with less than one year to maturity | 9,389 | 5,442 | 6,435 | 3,629 | ||||||||||||
Total Short Term Debt Issues | 26,344 | 20,401 | 9,500 | 6,127 | ||||||||||||
Long Term Debt Issues | ||||||||||||||||
USD Medium Term Notes | 15,358 | 8,790 | 15,680 | 8,146 | ||||||||||||
AUD Medium Term Notes | 4,850 | 4,453 | 6,272 | 2,813 | ||||||||||||
JPY Medium Term Notes | 868 | 734 | 692 | 520 | ||||||||||||
GBP Medium Term Notes | 4,401 | 3,837 | 2,736 | 1,981 | ||||||||||||
Other Currencies Medium Term Notes | 6,596 | 5,583 | 5,807 | 4,822 | ||||||||||||
Offshore Loans (all JPY) | — | 40 | — | 40 | ||||||||||||
Eurobonds | 204 | 204 | — | — | ||||||||||||
Total Long Term Debt Issues | 32,277 | 23,641 | 31,187 | 18,322 | ||||||||||||
Maturity Distribution of Debt Issues | ||||||||||||||||
Less than 3 months | 11,055 | 6,949 | 6,006 | 1,925 | ||||||||||||
3 months to 12 months | 15,288 | 13,452 | 3,493 | 4,202 | ||||||||||||
Between 1 and 5 years | 22,312 | 17,542 | 21,320 | 12,224 | ||||||||||||
Greater than 5 years | 9,966 | 6,099 | 9,868 | 6,098 | ||||||||||||
Total Debt Issues | 58,621 | 44,042 | 40,687 | 24,449 | ||||||||||||
§ | USD medium term notes: between 1 and 5 years – USD100 million (AUD130.80 million); Greater than 5 years – USD143.44 million (AUD187.62 million); |
§ | USD extendible notes: between 1 and 5 years – USD2,100 million (AUD2,746.78 million); |
§ | JPY medium term notes: between 1 and 5 years – JPY4 billion (AUD47.49 million); Greater than 5 years – JPY6 billion (AUD71.23 million); |
§ | CHF medium term notes: between 1 and 5 years – CHF300 million (AUD306.67 million); |
§ | CAD medium term notes: between 1 and 5 years – CAD25 million (AUD26.6 million); and |
§ | HKD medium term notes: between 1 and 5 years – HKD400 million (AUD67.33 million); Greater than 5 years – HKD207 million (AUD34.9 million). |
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GROUP | ||||||||||||
Year Ended 30 June | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
(AUD Millions, except where indicated) | ||||||||||||
US Commercial Paper | ||||||||||||
Outstanding at period end(1) | 10,141 | 9,381 | 6,163 | |||||||||
Maximum amount outstanding at any month end(2) | 10,178 | 11,983 | 8,973 | |||||||||
Approximate average amount outstanding(2) | 9,839 | 8,161 | 5,890 | |||||||||
Approximate weighted average rate on: | ||||||||||||
Average amount outstanding | 1.2 | % | 1.1 | % | 1.4 | % | ||||||
Outstanding at period end | 1.5 | % | 1.2 | % | 1.2 | % | ||||||
Euro Commercial Paper | ||||||||||||
Outstanding at period end(1) | 4,976 | 3,638 | 5,738 | |||||||||
Maximum amount outstanding at any month end(2) | 6,146 | 6,402 | 5,990 | |||||||||
Approximate average amount outstanding(2) | 3,800 | 4,798 | 3,132 | |||||||||
Approximate weighted average rate on: | ||||||||||||
Average amount outstanding | 2.2 | % | 1.0 | % | 1.3 | % | ||||||
Outstanding at period end | 2.8 | % | 1.2 | % | 1.1 | % | ||||||
Bill Reliquification(3) | ||||||||||||
Maximum amount outstanding at any month end(2) | — | — | 250 | |||||||||
Approximate average amount outstanding(2) | — | — | 23 | |||||||||
Approximate weighted average rate on: | ||||||||||||
Average amount outstanding | — | — | 4.9 | % | ||||||||
Other Commercial Paper | ||||||||||||
Outstanding at period end(1) | 1,838 | 1,940 | 2,420 | |||||||||
Maximum amount outstanding at any month end(2) | 2,110 | 3,216 | 3,066 | |||||||||
Approximate average amount outstanding(2) | 1,790 | 2,675 | 2,476 | |||||||||
Approximate weighted average rate on: | ||||||||||||
Average amount outstanding | 5.8 | % | 5.2 | % | 3.7 | % | ||||||
Outstanding at period end | 5.7 | % | 5.6 | % | 3.9 | % |
(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 difference between face value and book value would not be material given the short term nature of the borrowings. | |
(3) | Commercial bills sold under non recourse arrangements. |
As at | 30 June 2005 | 30 June 2004 | ||||||||
AUD 1.00 = | USD | 0.7643 | 0.6894 | |||||||
GBP | 0.4223 | 0.3823 | ||||||||
JPY | 84.165 | 74.914 | ||||||||
NZD | 1.090 | 1.097 | ||||||||
HKD | 5.940 | 5.378 | ||||||||
DEM | 1.235 | 1.116 | ||||||||
CHF | 0.978 | 0.8720 | ||||||||
IDR | 7,425 | 6,487 | ||||||||
THB | 31.531 | 28.229 | ||||||||
FJD | 1.301 | 1.239 | ||||||||
PHP | 42.946 | 38.731 | ||||||||
EUR | 0.6316 | 0.5706 |
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Table of Contents
GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Bills payable | 928 | 980 | 863 | 950 | ||||||||||||
Accrued interest payable | 1,355 | 1,325 | 1,226 | 1,140 | ||||||||||||
Accrued fees and other items payable | 1,255 | 1,151 | 860 | 829 | ||||||||||||
Securities purchased not delivered | 1,065 | 1,649 | 796 | 1,458 | ||||||||||||
Unrealised losses on trading derivatives (Note 39) | 11,914 | 12,188 | 11,854 | 12,156 | ||||||||||||
Intergroup deferred tax payable | — | — | 60 | 153 | ||||||||||||
Other liabilities | 1,569 | 1,847 | 999 | 1,202 | ||||||||||||
Total Bills Payable and Other Liabilities | 18,086 | 19,140 | 16,658 | 17,888 | ||||||||||||
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GROUP | BANK | |||||||||||||||||||||||||||||
Currency | 2005 | 2004 | 2003 | 2005 | 2004 | 2003 | ||||||||||||||||||||||||
Amount (M) | Footnotes | $M | $M | $M | $M | $M | $M | |||||||||||||||||||||||
Tier 1 Capital | ||||||||||||||||||||||||||||||
Exchangeable | FRN | USD38 | (1) | 49 | 55 | 59 | 49 | 55 | 59 | |||||||||||||||||||||
Exchangeable | FRN | USD95 | (2) | 124 | 138 | 142 | 124 | 138 | 142 | |||||||||||||||||||||
Undated | FRN | USD100 | (3) | 131 | 145 | 150 | 131 | 145 | 150 | |||||||||||||||||||||
Undated | TPS | USD550 | (4) | — | — | — | 719 | 799 | — | |||||||||||||||||||||
304 | 338 | 351 | 1,023 | 1,137 | 351 | |||||||||||||||||||||||||
Tier 2 Capital | ||||||||||||||||||||||||||||||
Extendible | FRN | AUD25 | (5) | — | 25 | 25 | — | 25 | 25 | |||||||||||||||||||||
Extendible | FRN | AUD275 | (5) | 275 | 275 | 275 | 275 | 275 | 275 | |||||||||||||||||||||
Subordinated | MTN | AUD185 | (6) | — | — | 185 | — | — | 185 | |||||||||||||||||||||
Subordinated | FRN | AUD115 | (6) | — | — | 115 | — | — | 115 | |||||||||||||||||||||
Subordinated | FRN | AUD25 | (7) | 25 | 25 | 25 | 25 | 25 | 25 | |||||||||||||||||||||
Subordinated | MTN | AUD200 | (8) | — | 200 | 199 | — | 200 | 199 | |||||||||||||||||||||
Subordinated | FRN | AUD50 | (8) | — | 50 | 50 | — | 50 | 50 | |||||||||||||||||||||
Subordinated | Notes | USD300 | (9) | 549 | 549 | 549 | 549 | 549 | 549 | |||||||||||||||||||||
Subordinated | FRN | USD450 | (9) | — | 650 | 672 | — | 650 | 672 | |||||||||||||||||||||
Subordinated | EMTN | JPY20,000 | (10) | 216 | 240 | 248 | 216 | 240 | 248 | |||||||||||||||||||||
Subordinated | EMTN | USD200 | (11) | — | 313 | 313 | — | 313 | 313 | |||||||||||||||||||||
Subordinated | EMTN | USD75 | (12) | — | 115 | 115 | — | 115 | 115 | |||||||||||||||||||||
Subordinated | EMTN | USD100 | (13) | — | 152 | 152 | — | 152 | 152 | |||||||||||||||||||||
Subordinated | EMTN | USD400 | (14) | 501 | 501 | 501 | 501 | 501 | 501 | |||||||||||||||||||||
Subordinated | EMTN | GBP200 | (15) | 408 | 408 | 408 | 408 | 408 | 408 | |||||||||||||||||||||
Subordinated | EMTN | JPY30,000 | (16) | 387 | 429 | 444 | 387 | 429 | 444 | |||||||||||||||||||||
Subordinated | Loan | NZD100 | (17) | — | 92 | 88 | — | — | — | |||||||||||||||||||||
Subordinated | FRN | AUD210 | (18) | — | 210 | 210 | — | 210 | 210 | |||||||||||||||||||||
Subordinated | FRN | AUD38 | (19) | — | 38 | 38 | — | 38 | 38 | |||||||||||||||||||||
Subordinated | Notes | AUD130 | (20) | 130 | 130 | 130 | 130 | 130 | 130 | |||||||||||||||||||||
Subordinated | Other | AUD21 | (21) | — | 21 | 35 | — | 21 | 35 | |||||||||||||||||||||
Subordinated | Notes | USD350 | (22) | 536 | 512 | 524 | 536 | 512 | 524 | |||||||||||||||||||||
Subordinated | EMTN | GBP150 | (23) | 373 | 373 | 373 | 373 | 373 | 373 | |||||||||||||||||||||
Subordinated | MTN | AUD300 | (24) | 300 | 300 | — | 300 | 300 | — | |||||||||||||||||||||
Subordinated | FRN | AUD200 | (24) | 200 | 200 | — | 200 | 200 | — | |||||||||||||||||||||
Subordinated | EMTN | JPY10,000 | (25) | 127 | 127 | — | 127 | 127 | — | |||||||||||||||||||||
Subordinated | EMTN | USD500 | (26) | 711 | 358 | — | 711 | 358 | — | |||||||||||||||||||||
Subordinated | FRN | AUD300 | (27) | 300 | — | — | 300 | — | — | |||||||||||||||||||||
Subordinated | EMTN | EUR300 | (28) | 501 | — | — | 501 | — | — | |||||||||||||||||||||
Subordinated | EMTN | USD100 | (29) | 126 | — | — | 126 | — | — | |||||||||||||||||||||
Subordinated | Notes | NZD350 | (30) | 322 | — | — | 322 | — | — | |||||||||||||||||||||
5,987 | 6,293 | 5,674 | 5,987 | 6,201 | 5,586 | |||||||||||||||||||||||||
Total Loan Capital | 6,291 | 6,631 | 6,025 | 7,010 | 7,338 | 5,937 | ||||||||||||||||||||||||
(1) | USD 300 million undated Floating Rate Notes (“FRNs”) issued 11 July 1988 exchangeable into dated FRNs. |
Due July 2006 | : | USD32.5 million | ||
Undated | : | USD5 million |
(2) | USD 400 million undated FRNs issued 22 February 1989 exchangeable into dated FRNs. |
Due February 2006 | : | USD24 million | ||
Due February 2008 | : | USD7 million | ||
Undated | : | USD64 million |
(3) | USD 100 million undated capital notes issued on 15 October 1986. |
• | 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. |
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(4) | USD550 million convertible notes issued August 2003. | |
(5) | AUD275 million extendible floating rate note issued December 1989, due December 2014; |
• | 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. |
(6) | AUD300 million subordinated notes, issued February 1999; due February 2009, split into AUD185 million fixed rate notes and AUD115 million floating rate notes. Called and redeemed February 2004. |
(7) | AUD25 million subordinated FRN, issued April 1999, due April 2029. |
(8) | AUD250 million subordinated notes, issued November 1999, due November 2009; split into AUD200 million fixed rate notes and AUD50 million floating rate notes. Called and redeemed November 2004. |
(9) | USD750 million subordinated notes, issued June 2000, due June 2010; split into USD300 million fixed rate notes and USD450 million floating rate notes. The floating rate notes were called and redeemed in June 2005. |
(10) | JPY20 billion perpetual subordinated EMTN, issued February 1999. |
(11) | USD200 million subordinated EMTN, issued November 1999, due November 2009. Called and redeemed November 2004. |
(12) | USD75 million subordinated EMTN, issued January 2000, due January 2010. Called and redeemed January 2005. |
(13) | USD100 million subordinated EMTN, issued January 2000, due January 2010. Called and redeemed January 2005. |
(14) | USD400 million subordinated EMTN issued June 1996 due July 2006. | |
(15) | GBP200 million subordinated EMTN issued March 1996 due December 2006. | |
(16) | JPY30 billion subordinated EMTN issued October 1995 due October 2015. |
(17) | NZD100 million subordinated loan matures 15 December 2009. Called and repaid December 2004. |
(18) | AUD210 million Euro FRN issued September 1996, matured September 2004. | |
(19) | AUD38 million FRN issued December 1997, matured December 2004. |
(20) | AUD130 million subordinated notes comprised as follows: AUD10 million fixed rate notes issued 12 December 1995, maturing 12 December 2005. AUD110 million floating rate notes issued 12 December 1995, maturing 12 December 2005. AUD5 million fixed rate notes issued 17 December 1996, maturing 12 December 2005. AUD5 million floating rate notes issued 17 December 1996, maturing 12 December 2005. |
(21) | Comprises 8 subordinated notes and FRN issues. The face value amounts are less than $10 million each and are all in Australian Dollars. The maturities range from August 2009 to October 2009. All called and redeemed between August 2004 and October 2004. |
(22) | USD350 million subordinated fixed rate note, issued June 2003, due June 2018. | |
(23) | GBP150 million subordinated EMTN, issued June 2003, due December 2023. |
(24) | AUD500 million subordinated notes, issued February 2004, due February 2014; split into AUD300 million fixed rate notes and AUD200 million floating rate notes. |
(25) | JPY10 billion subordinated EMTN, issued May 2004, due May 2034. |
(26) | USD500 million subordinated EMTN issued in June 2004 (USD250 million) and August 2004 (USD250 million), due August 2014. |
(27) | AUD300 million subordinated floating rate notes, issued February 2005, due February 2015. |
(28) | EUR300 million subordinated EMTN issued March 2005, due March 2015. | |
(29) | USD100 million subordinated EMTN issued March 2005, due March 2025. | |
(30) | NZD350 million subordinated notes issued May 2005, due April 2015. |
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BANK | ||||||||
2005 | 2004 | |||||||
Issued and Paid Up Ordinary Capital | $M | $M | ||||||
Ordinary Share Capital | ||||||||
Opening balance | 13,359 | 12,678 | ||||||
Dividend Reinvestment Plan: Final Dividend prior year | 246 | 201 | ||||||
Dividend Reinvestment Plan: Interim Dividend | 200 | 188 | ||||||
Share buy back | — | (213 | ) | |||||
Share purchase plan | — | 467 | ||||||
Exercise of Executive Options | 67 | 38 | ||||||
Issue costs | (1 | ) | — | |||||
Closing balance | 13,871 | 13,359 | ||||||
Shares on Issue | Number | Number | ||||||
Opening balance | 1,264,006,062 | 1,253,581,363 | ||||||
Dividend reinvestment plan issues: | ||||||||
2003/2004 Final Dividend fully paid ordinary shares at $30.14 | 8,172,546 | — | ||||||
2004/2005 Interim Dividend fully paid ordinary shares at $35.90 | 5,581,364 | — | ||||||
2002/2003 Final Dividend fully paid ordinary shares at $28.03 | — | 7,165,289 | ||||||
2003/2004 Interim Dividend fully paid ordinary shares at $31.61 | — | 5,916,319 | ||||||
Share buy back | — | (19,360,759 | ) | |||||
Share purchase plan shares issued at $31.36 | — | 14,891,250 | ||||||
Exercise under Executive Option Plan | 2,516,200 | 1,812,600 | ||||||
Closing balance | 1,280,276,172 | 1,264,006,062 | ||||||
Preference Share Capital | BANK | |||||||
2005 | 2004 | |||||||
PERLS | $M | $M | ||||||
PERLS Capital issued and paid up | 687 | 687 | ||||||
Number | Number | |||||||
3,500,000 | 3,500,000 |
GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Other Equity Instruments | $M | $M | $M | $M | ||||||||||||
Other equity instruments issued and paid up | 1,573 | 1,573 | 737 | 737 | ||||||||||||
Number | Number | Number | Number | |||||||||||||
4,300,000 | 4,300,000 | 550,000 | 550,000 |
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• | As declared in last year’s report, a fully franked final dividend of 104 cents per share amounting to $1,315 million was paid on 24 September 2004. The payment comprised cash disbursements of $1,069 million with $246 million being reinvested by participants through the Dividend Reinvestment Plan; |
• | In respect of the current year, a fully franked interim dividend of 85 cents per share amounting to $1,083 million was paid on 31 March 2005. The payment comprised cash disbursements of $883 million with $200 million being reinvested by participants through the Dividend Reinvestment Plan; and |
• | Additionally, quarterly dividends totalling $39 million for the year were paid on the PERLS; $34 million on the PERLS II; $42 million on the Trust Preferred Securities; $9 million on the ASB Capital preference shares; and $7 million on the ASB Capital No.2 preference shares. |
§ | 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”). |
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Issue Date | Bonus Ordinary | No. of | Shares issued to | Issue | ||||||||||||
Shares Issued(1) | Participants | Each Participant | Price(2) | |||||||||||||
13 Oct 2000 | 872,620 | 24,932 | 35 | $ | 27.78 | |||||||||||
20 Dec 2000 | 805 | 23 | 35 | $ | 27.78 | |||||||||||
31 Oct 2001 | 893,554 | 26,281 | 34 | $ | 28.95 | |||||||||||
3 Dec 2001 | 3,876 | 114 | 34 | $ | 28.95 | |||||||||||
31 Jan 2002 | 1,938 | 57 | 34 | $ | 28.95 | |||||||||||
Purchase | Ordinary Shares | No. of | Shares allocated to | Allocation | ||||||||||||
Date | Purchased | Participants | Each Participant | Price(3) | ||||||||||||
31 Oct 2002 | 830,874 | 25,178 | 33 | $ | 29.71 | |||||||||||
22 Jan 2003 | 1,584 | 48 | 33 | $ | 29.71 | |||||||||||
31 Oct 2003 | 683,617 | 23,573 | 29 | $ | 27.53 | |||||||||||
29 Oct 2004 | 699,918 | 22,578 | 31 | $ | 31.52 | |||||||||||
(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 five trading day period up to and including the grant date. The Allocation Price x Shares issued to each participant effectively represents about $1,000 of free shares for the 2002 and 2004 Offers and $800 of free shares for the 2003 Offer. |
Allotment Date | Participants | Shares Purchased | Average Purchase Price | |||||||||
24 Sept 2004 | 1,449 | 1,858,984 | $ | 29.85 | ||||||||
30 Sept 2004 | 756 | 259,890 | $ | 30.05 | ||||||||
30 Dec 2004 | 80 | 12,274 | $ | 32.11 | ||||||||
22 Apr 2005 | 57 | 8,704 | $ | 35.97 | ||||||||
Details of Movements | July 04 – June 05 | July 03 - June 04 | ||||||
Shares held under the Plan at the beginning of year | 2,790,353 | 2,497,184 | ||||||
Shares allocated during year | 2,067,281 | 2,121,075 | ||||||
Shares vested during year | (2,016,790 | ) | (1,715,807 | ) | ||||
Shares forfeited during year | (224,073 | ) | (112,099 | ) | ||||
Shares held under the Plan at end of year | 2,616,771 | 2,790,353 | ||||||
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§ | 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 ‘Banks and Finance Accumulation Index’ excluding the Bank) was widened in 2001/2002 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. |
Year of | Issue | Options | Options | Exercise | Exercise | |||||||||
Grant | Commencement Date | Date | Issued | Outstanding(1) | Participants | Price | Period | |||||||
14 Sep 2003 to | ||||||||||||||
2000 | 13 Sep 2000 | 7 Feb 01 | 577,500 | 247,500 | 16 | $26.97(2) | 13 Sep 2010(3) | |||||||
14 Sep 2003 to | ||||||||||||||
13 Sep 2000 | 31 Oct 01 | 12,500 | — | 1 | $26.97(2) | 13 Sep 2010(3) | ||||||||
4 Sep 2004 to | ||||||||||||||
2001 | 3 Sep 2001 | 31 Oct 01 | 2,882,000 | 1,689,100 | 61 | $30.12(2) | 3 Sep 2011(4) | |||||||
4 Sep 2004 to | ||||||||||||||
3 Sep 2001 | 31 Jan 02 | 12,500 | 12,500 | 1 | $30.12(2) | 3 Sep 2011(4) | ||||||||
4 Sep 2004 to | ||||||||||||||
3 Sep 2001 | 15 Apr 02 | 100,000 | 100,000 | 1 | $30.12(2) | 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 2003 - June 2004 | July 2004 – June 2005 | ||||||||||||||
Year of Grant | 2000 | 2001 | 2000 | 2001 | ||||||||||||
Total options: | ||||||||||||||||
Held by participants at the start of year | 427,500 | 2,336,400 | 402,500 | 2,235,200 | ||||||||||||
Granted during year | — | — | — | — | ||||||||||||
Exercised during year | — | — | 155,000 | 403,900 | ||||||||||||
Lapsed during year | — | 101,200 | — | 29,700 | ||||||||||||
Outstanding at the end of year | 427,500 | 2,235,200 | 247,500 | 1,801,600 | ||||||||||||
Granted from 30 June to the date of report | — | — | — | — | ||||||||||||
Exercised from 30 June to date of report | 25,000 | — | — | 50,000 | ||||||||||||
Lapsed from 30 June to the date of report | — | — | — | — | ||||||||||||
Outstanding as at the date of report | 402,500 | 2,235,200 | 247,500 | 1,751,600 | ||||||||||||
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Year of | Purchase | Shares | Shares | Participants | Vesting Period | Average | ||||||
Grant | Date | Purchased | Allocated | Purchase | ||||||||
Price | ||||||||||||
2000 | 20 Feb 2001 | 361,100 | 361,100 | 61 | 14 Sept 2003 to 13 Sept 2005(5) | $29.72 | ||||||
31 Oct 2001 | 2,000 | 2,000 | 1 | 14 Sept 2003 to 13 Sept 2005(5) | $29.25 | |||||||
2001 | 31 Oct 2001 | 652,100 | 661,500 | (1) | 241 | 4 Sept 2004 to 3 Sept 2006(6) | $29.25 | |||||
2002 | 22 Nov 2002 | 357,500 | 545,500 | (2) | 195 | 3 Sept 2005 to 2 Sept 2007(7) | $28.26 | |||||
2003 | 12 Nov 2003 | 285,531 | 595,600 | (3) | 255 | 2 Sept 2006 to 1 Sept 2008(7) | $28.33 | |||||
2004 | 11 Nov 2004 | 225,934 | 522,290 | (4) | 259 | 23 Aug 2007 to 23 Aug 2009(7) | $29.87 | |||||
(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 fifty percent 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 term of the grant and (if required) shortly after the time of vesting. | |
(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 fifty percent of the maximum entitlement that participants may receive – refer to footnote 2 above for further information. | |
(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 fifty percent of the maximum entitlement that participants may receive – refer to footnote 2 above for further information. | |
(5) | Performance hurdle was satisfied on 31 March 2004 and as a result 195,700 shares vested to participants of the 2000 grant. | |
(6) | Performance hurdle was satisfied on 3 October 2004 and as a result 423,500 shares vested to participants of the 2001 grant. | |
(7) | Performance hurdle must be satisfied within the vesting period, otherwise shares will be forfeited. |
July 03 - June 04 | July 04 - June 05 | |||||||||||||||||||||||||||||||
Year of Grant | 2000 | 2001 | 2002 | 2003 | 2001 | 2002 | 2003 | 2004 | ||||||||||||||||||||||||
Total reward shares: | ||||||||||||||||||||||||||||||||
Held by participants at the start of year | 217,100 | 518,500 | 515,300 | — | 437,000 | 445,825 | 557,500 | — | ||||||||||||||||||||||||
Granted during year | — | — | — | 597,100 | — | — | — | 597,975 | ||||||||||||||||||||||||
Vested during year | 195,700 | — | — | — | 423,500 | — | — | — | ||||||||||||||||||||||||
Lapsed during year | 21,400 | 59,000 | 43,225 | 10,725 | 13,500 | 68,975 | 94,650 | 53,075 | ||||||||||||||||||||||||
Outstanding at the end of year | — | 459,500 | 472,075 | 586,375 | — | 376,850 | 462,850 | 544,900 | ||||||||||||||||||||||||
Lapsed from 30 June to date of report | — | 22,500 | 26,250 | 28,875 | — | 11,400 | 8,950 | 8,750 | ||||||||||||||||||||||||
Outstanding as at the date of report | — | 437,000 | 445,825 | 557,500 | — | 365,450 | 453,900 | 536,150 | ||||||||||||||||||||||||
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Commencement | Issue | Options | Options | Participants | Exercise | Exercise | ||||||
Date | Date | Issued | Outstanding | Price(1) | 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 | 450,000 | 38 | $23.84(2) | 25 Aug 02 to 24 Aug 09(3) | ||||||
13 Sep 2000 | 13 Oct 2000 | 2,002,500 | 637,300 | 50 | $26.97(2) | 14 Sep 03 to 13 Sep 10(4) | ||||||
(1) | 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. |
1 July 2003 to 30 June 2004(1) | 1 July 2004 to 30 June 2005(1) | |||||||||||||||||||||
Year of Grant | 1998 | 1999 | 2000 | 1999 | 2000 | |||||||||||||||||
Total options - | ||||||||||||||||||||||
Held by participants at the start of year | 312,500 | 3,221,000 | 1,336,200 | 1,875,000 | 1,144,600 | |||||||||||||||||
Exercised during year | 312,500 | 1,271,000 | 129,100 | 1,425,000 | 507,300 | |||||||||||||||||
Lapsed during year | — | 25,000 | 12,500 | — | — | |||||||||||||||||
Outstanding at the end of year | — | 1,925,000 | 1,194,600 | 450,000 | 637,300 | |||||||||||||||||
Exercised from 30 June to date of report | — | 50,000 | 50,000 | — | 75,400 | |||||||||||||||||
Lapsed from 30 June to date of report | — | — | — | — | — | |||||||||||||||||
Outstanding as at the date of report | — | 1,875,000 | 1,144,600 | 450,000 | 561,900 | |||||||||||||||||
(1) | The EOP was discontinued in 2000/2001 and no options have been granted under the plan during the last four reporting periods. |
Option | Shares | Price paid | Total | |||||||||
Issue Date | Issued | per Share | Consideration Paid | |||||||||
24 Sep 1999 | 1,475,000 | $ | 23.84 | $ | 35,164,000 | |||||||
13 Oct 2000 | 632,700 | $ | 26.97 | $ | 17,063,919 | |||||||
7 Feb 2001 | 180,000 | $ | 26.97 | $ | 4,854,600 | |||||||
3 Sep 2001 | 453,900 | $ | 30.12 | $ | 13,671,468 | |||||||
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Quarter Ending | Total Fees | Participants | Shares | Average | ||||
Sacrificed | Purchased | Purchase Price | ||||||
30 Sep 2004 | $74,406 | 11 | 2,475 | $30.05 | ||||
31 Dec 2004 | $76,218 | 9 | 2,373 | $32.11 | ||||
31 Mar 2005 | $110,958 | 9 | 3,086 | $35.97 |
GROUP | ||||||||
2005 | 2004 | |||||||
$M | $M | |||||||
Controlled Entities: | ||||||||
Share Capital(1) | 623 | 300 | ||||||
Retained profits and reserves | 8 | 4 | ||||||
Life Insurance Statutory funds | 1,158 | 2,176 | ||||||
Total Outside Equity Interests | 1,789 | 2,480 | ||||||
(1) | ASB Perpetual Preference Shares — $505 million. |
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§ | Issue of NZ$350 million (AUD$323 million) of Perpetual Preference Shares in December 2004; |
§ | Issue of $200 million of shares in March 2005 to satisfy the DRP in respect of the interim dividend for 2004/05; and |
§ | In accordance with APRA guidelines, the estimated issue of $272 million of shares to satisfy the DRP in respect of the final dividend for 2004/05. |
§ | From 1 July 2004, APRA requires banks to deduct certain capitalised expenses from Tier One capital. This change in regulatory requirements resulted in a $107 million decrease in Tier One capital. |
§ | Issue of the equivalent of AUD$1,554 million Lower Tier Two capital; |
§ | Call of the equivalent of AUD$1,866 million notes. However, as some of the notes had been amortised in accordance with APRA requirements, the impact was to reduce Tier Two capital in the year to 30 June 2005 by AUD$1,592 million; and |
§ | Reduction in Tier Two note and bond issues of AUD$319 million resulting from changes in foreign exchange rates (whilst these notes are hedged, the unhedged value is included in the calculation of regulatory capital in accordance with APRA regulations). |
§ | Dividends paid to the Bank from the life insurance and funds management businesses in excess of the dividend paid in respect of the after-tax profits of these businesses (refer to Note 34 to the financial statements). |
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GROUP | ||||||||
2005 | 2004 | |||||||
Actual | Actual | |||||||
Risk-Weighted Capital Ratios | % | % | ||||||
Tier One | 7.46 | 7.43 | ||||||
Tier Two | 3.21 | 3.93 | ||||||
Less deductions | (0.92 | ) | (1.11 | ) | ||||
Total | 9.75 | 10.25 | ||||||
Adjusted Common Equity (1) | 4.91 | 4.75 | ||||||
GROUP | ||||||||
2005 | 2004 | |||||||
Regulatory Capital | $M | $M | ||||||
Tier One capital | ||||||||
Shareholders’ equity | 26,060 | 24,885 | ||||||
Eligible loan capital | 304 | 338 | ||||||
Estimated reinvestment under Dividend Reinvestment Plan(2) | 272 | 250 | ||||||
Foreign currency translation reserve related to non-consolidated subsidiaries | 211 | 179 | ||||||
Deduct: | ||||||||
Asset revaluation reserve | (92 | ) | (61 | ) | ||||
Goodwill | (4,394 | ) | (4,705 | ) | ||||
Expected dividend | (1,434 | ) | (1,315 | ) | ||||
Intangible component of investment in non-consolidated subsidiaries (3) | (5,397 | ) | (4,674 | ) | ||||
Outside equity interest in entities controlled by non-consolidated subsidiaries | (111 | ) | (114 | ) | ||||
Outside equity interest in insurance statutory funds and other funds | (1,158 | ) | (2,176 | ) | ||||
Capitalised expenses(4) | (107 | ) | — | |||||
Other | (13 | ) | (19 | ) | ||||
Total Tier One capital | 14,141 | 12,588 | ||||||
Tier Two capital | ||||||||
Asset revaluation reserve | 92 | 61 | ||||||
General provision for bad and doubtful debts(5) | 1,389 | 1,390 | ||||||
FITB related to general provision | (414 | ) | (398 | ) | ||||
Upper Tier Two note and bond issues | 237 | 267 | ||||||
Lower Tier Two note and bond issues(6) (7) | 4,783 | 5,338 | ||||||
Total Tier Two capital | 6,087 | 6,658 | ||||||
Total capital | 20,228 | 19,246 | ||||||
Deduct: | ||||||||
Investment in non-consolidated subsidiaries (net of intangible component deducted from Tier One capital)(3) | (1,721 | ) | (1,886 | ) | ||||
Other deductions | (28 | ) | (5 | ) | ||||
Capital Base | 18,479 | 17,355 | ||||||
(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 Standard & Poor’s methodology. | |
(2) | Based on reinvestment experience related to the Bank’s Dividend Reinvestment Plan. | |
(3) | Refer to Note 34 for a reconciliation of the components of the carrying value of the life insurance and funds management business to the value of investments in non-consolidated subsidiaries. | |
(4) | Effective 1 July 2004, APRA requires banks to deduct certain capitalised expenses from Tier One capital. | |
(5) | Excludes general provision for bad and doubtful debts in non-consolidated subsidiaries. | |
(6) | APRA requires these Lower Tier Two note and bond issues to be included as if they were un-hedged. | |
(7) | 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. |
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GROUP | ||||||||
2005 | 2004 | |||||||
Adjusted Common Equity(1) | $M | $M | ||||||
Tier One capital | 14,141 | 12,588 | ||||||
Deduct: | ||||||||
Eligible loan capital | (304 | ) | (338 | ) | ||||
Preference share capital | (687 | ) | (687 | ) | ||||
Other equity instruments | (1,573 | ) | (1,573 | ) | ||||
Outside equity interest (net of outside equity interest component deducted from Tier One capital) | (520 | ) | (190 | ) | ||||
Investment in non-consolidated subsidiaries (net of intangible component deducted from Tier One capital)(2) | (1,721 | ) | (1,886 | ) | ||||
Other deductions | (28 | ) | (5 | ) | ||||
Other | — | 139 | ||||||
Total Adjusted Common Equity | 9,308 | 8,048 | ||||||
(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 Standard & Poor’s methodology. | |
(2) | Refer to Note 34 for a reconciliation of the components of the carrying value of the life insurance and funds management business to the value of investments in non-consolidated subsidiaries. |
GROUP | ||||||||||||||||||||
Face Value | Risk | Risk-Weighted | ||||||||||||||||||
Weights | Balance | |||||||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||||||
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 | 27,447 | 27,554 | 0 | % | — | — | ||||||||||||||
Claims on OECD banks and local governments | 14,754 | 15,020 | 20 | % | 2,951 | 3,004 | ||||||||||||||
Advances secured by residential property (1) | 143,746 | 125,026 | 50 | % | 71,873 | 62,513 | ||||||||||||||
All other assets | 92,510 | 83,256 | 100 | % | 92,510 | 83,256 | ||||||||||||||
Total On Balance Sheet Assets — Credit Risk(2) (3) | 278,457 | 250,856 | 167,334 | 148,773 | ||||||||||||||||
GROUP | ||||||||||||||||||||||||
Face Value | Credit | Risk-Weighted | ||||||||||||||||||||||
Equivalent | Balance | |||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | |||||||||||||||||||
$M | $M | $M | $M | $M | $M | |||||||||||||||||||
Off-Balance Sheet Exposures | ||||||||||||||||||||||||
Direct credit substitutes | 3,308 | 3,293 | 3,308 | 3,293 | 2,622 | 2,836 | ||||||||||||||||||
Trade and performance related items | 1,280 | 1,069 | 584 | 483 | 540 | 453 | ||||||||||||||||||
Commitments | 76,581 | 65,097 | 13,839 | 12,745 | 10,328 | 9,238 | ||||||||||||||||||
Foreign exchange, interest rate and other market related transactions | 885,700 | 769,742 | 20,814 | 20,069 | 5,881 | 5,614 | ||||||||||||||||||
Total Off Balance Sheet Exposures — Credit Risk(4) | 966,869 | 839,201 | 38,545 | 36,590 | 19,371 | 18,141 | ||||||||||||||||||
Total Risk-Weighted Assets — Credit Risk | 186,705 | 166,914 | ||||||||||||||||||||||
Risk-Weighted Assets — Market Risk | 2,854 | 2,407 | ||||||||||||||||||||||
Total Risk-Weighted Assets | 189,559 | 169,321 | ||||||||||||||||||||||
(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, general provision for bad and doubtful debts, and investments in life insurance and fund 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 residential property account for $6.2 billion of off balance sheet credit equivalent assets ($3.1 billion of off balance sheet risk-weighted assets). |
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GROUP | ||||||||||||||||||||||||||||||||
Maturity Period At 30 June 2005 | ||||||||||||||||||||||||||||||||
0 to 3 | 3 to 12 | 1 to 5 | Over | Not | ||||||||||||||||||||||||||||
At Call | Overdrafts | months | months | years | 5 years | specified | Total | |||||||||||||||||||||||||
$M | $M | $M | $M | $M | $M | $M | $M | |||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash and liquid assets | 916 | — | 4,799 | — | — | — | — | 5,715 | ||||||||||||||||||||||||
Receivables due from other financial institutions | 378 | — | 5,039 | 416 | 51 | 321 | — | 6,205 | ||||||||||||||||||||||||
Trading securities(1) | — | — | 14,628 | — | — | — | — | 14,628 | ||||||||||||||||||||||||
Investment securities | — | — | 1,390 | 1,256 | 5,003 | 2,623 | — | 10,272 | ||||||||||||||||||||||||
Loans, advances and other receivables(2) | 4,837 | 5,225 | 21,044 | 28,195 | 49,434 | 110,171 | (1,390 | ) | 217,516 | |||||||||||||||||||||||
Bank acceptances of customers | — | — | 16,387 | 399 | — | — | — | 16,786 | ||||||||||||||||||||||||
Life assets(3) | 181 | — | 4,181 | 483 | 3,516 | 3,170 | 16,306 | 27,837 | ||||||||||||||||||||||||
Other monetary assets | 1 | — | 15,505 | 20 | 1 | 17 | 115 | 15,659 | ||||||||||||||||||||||||
Total monetary assets | 6,313 | 5,225 | 82,973 | 30,769 | 58,005 | 116,302 | 15,031 | 314,618 | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Deposits and other public borrowings(3) | 93,684 | — | 39,974 | 29,958 | 4,274 | 139 | — | 168,029 | ||||||||||||||||||||||||
Payables due 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 | — | — | 11,071 | 15,664 | 24,750 | 13,427 | — | 64,912 | ||||||||||||||||||||||||
Other monetary liabilities | 8 | — | 17,421 | 30 | 9 | 7 | 174 | 17,649 | ||||||||||||||||||||||||
Total monetary liabilities | 94,501 | — | 90,907 | 47,211 | 29,033 | 13,573 | 24,868 | 300,093 | ||||||||||||||||||||||||
(1) | Trading securities are purchased without the intention to hold until maturity and are categorised as maturing within 3 months. | |
(2) | $116 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 the Interest Rate Risk Sensitivity table in Note 39. |
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GROUP | ||||||||||||||||||||||||||||||||
Maturity Period At 30 June 2004 | ||||||||||||||||||||||||||||||||
0 to 3 | 3 to 12 | 1 to 5 | Over | Not | ||||||||||||||||||||||||||||
At Call | Overdrafts | months | Months | years | 5 years | specified | Total | |||||||||||||||||||||||||
$M | $M | $M | $M | $M | $M | $M | $M | |||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash and liquid assets | 888 | — | 5,565 | — | — | — | — | 6,453 | ||||||||||||||||||||||||
Receivables due from other financial institutions | 774 | — | 7,126 | 80 | 70 | 319 | — | 8,369 | ||||||||||||||||||||||||
Trading securities(1) | — | — | 14,896 | — | — | — | — | 14,896 | ||||||||||||||||||||||||
Investment securities | — | — | 1,952 | 1,646 | 5,145 | 2,704 | — | 11,447 | ||||||||||||||||||||||||
Loans, advances and other receivables(2) | 2,646 | 4,904 | 27,597 | 19,883 | 39,957 | 95,797 | (1,393 | ) | 189,391 | |||||||||||||||||||||||
Bank acceptances of customers | — | — | 8,643 | 6,376 | — | — | — | 15,019 | ||||||||||||||||||||||||
Life assets(3) | 51 | — | 2,948 | 554 | 3,924 | 3,466 | 17,999 | 28,942 | ||||||||||||||||||||||||
Other monetary assets | 390 | — | 17,963 | 5 | — | — | 174 | 18,532 | ||||||||||||||||||||||||
Total Monetary Assets | 4,749 | 4,904 | 86,690 | 28,544 | 49,096 | 102,286 | 16,780 | 293,049 | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Deposits and other public borrowings(3) | 88,691 | — | 48,863 | 21,191 | 3,594 | 838 | — | 163,177 | ||||||||||||||||||||||||
Payables due to other financial institutions | 536 | — | 4,564 | 1,529 | 12 | — | — | 6,641 | ||||||||||||||||||||||||
Bank acceptances | — | — | 8,643 | �� | 6,376 | — | — | — | 15,019 | |||||||||||||||||||||||
Life liabilities | — | — | — | — | — | — | 24,638 | 24,638 | ||||||||||||||||||||||||
Debt issues and loan capital | — | — | 7,160 | 13,699 | 19,162 | 10,249 | 403 | 50,673 | ||||||||||||||||||||||||
Other monetary liabilities | 9 | — | 17,996 | 918 | 32 | 8 | 196 | 19,159 | ||||||||||||||||||||||||
Total Monetary Liabilities | 89,236 | — | 87,226 | 43,713 | 22,800 | 11,095 | 25,237 | 279,307 | ||||||||||||||||||||||||
(1) | Trading securities are purchased without the intention to hold until maturity and are categorised as maturing within three months. | |
(2) | $102 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 39. |
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GROUP | ||||||||||||||||
Year Ended 30 June 2005 | ||||||||||||||||
Primary Segment | Funds | |||||||||||||||
Business Segments | Banking | Management | Insurance | Total | ||||||||||||
Financial Performance | $M | $M | $M | $M | ||||||||||||
Interest income | 16,194 | — | — | 16,194 | ||||||||||||
Premium and related revenue | — | — | 1,132 | 1,132 | ||||||||||||
Other income | 3,519 | 3,269 | 1,186 | 7,974 | ||||||||||||
Appraisal value uplift | — | 301 | 477 | 778 | ||||||||||||
Total Revenue | 19,713 | 3,570 | 2,795 | 26,078 | ||||||||||||
Interest expense | 10,228 | — | — | 10,228 | ||||||||||||
Segment result before tax, goodwill amortisation and appraisal value uplift | 4,103 | 560 | 522 | 5,185 | ||||||||||||
Income tax expense | (1,220 | ) | (204 | ) | (213 | ) | (1,637 | ) | ||||||||
Segment result after tax and before goodwill amortisation and appraisal value uplift | 2,883 | 356 | 309 | 3,548 | ||||||||||||
Outside equity interest | (3 | ) | (7 | ) | — | (10 | ) | |||||||||
Segment result after tax and outside equity interest before goodwill amortisation and appraisal value uplift | 2,880 | 349 | 309 | 3,538 | ||||||||||||
Goodwill amortisation | (303 | ) | (17 | ) | (5 | ) | (325 | ) | ||||||||
Appraisal value uplift | — | 301 | 477 | 778 | ||||||||||||
Net profit attributable to Shareholders of the Bank | 2,577 | 633 | 781 | 3,991 | ||||||||||||
Non-Cash Expenses | ||||||||||||||||
Goodwill amortisation | 303 | 17 | 5 | 325 | ||||||||||||
Charge for bad and doubtful debts | 322 | — | — | 322 | ||||||||||||
Depreciation | 135 | 8 | 13 | 156 | ||||||||||||
Other | 84 | 27 | — | 111 | ||||||||||||
Financial Position | ||||||||||||||||
Total Assets | 292,026 | 19,306 | 17,703 | 329,035 | ||||||||||||
Acquisition of Property, Plant & Equipment, | ||||||||||||||||
Intangibles and other Non-Current Assets | 303 | 8 | 39 | 350 | ||||||||||||
Associate Investments | 19 | 1 | 32 | 52 | ||||||||||||
Total Liabilities | 275,751 | 16,844 | 10,380 | 302,975 |
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GROUP | ||||||||||||||||
Year Ended 30 June 2004 | ||||||||||||||||
Primary Segment | Funds | |||||||||||||||
Business Segments | Banking | Management | Insurance | Total | ||||||||||||
Financial Performance | $M | $M | $M | $M | ||||||||||||
Interest income | 13,287 | — | — | 13,287 | ||||||||||||
Premium and related revenue | — | — | 1,012 | 1,012 | ||||||||||||
Other income | 3,720 | 3,142 | 840 | 7,702 | ||||||||||||
Appraisal value (reduction)/uplift | — | (95 | ) | 296 | 201 | |||||||||||
Total Revenue | 17,007 | 3,047 | 2,148 | 22,202 | ||||||||||||
Interest expense | 7,877 | — | — | 7,877 | ||||||||||||
Segment result before tax, goodwill amortisation and appraisal value uplift | 3,091 | 504 | 371 | 3,966 | ||||||||||||
Income tax expense | (914 | ) | (228 | ) | (120 | ) | (1,262 | ) | ||||||||
Segment result after income tax and before goodwill amortisation and appraisal value uplift | 2,177 | 276 | 251 | 2,704 | ||||||||||||
Outside equity interest | (1 | ) | (8 | ) | — | (9 | ) | |||||||||
Segment result after tax and outside equity interest before goodwill amortisation and appraisal value uplift | 2,176 | 268 | 251 | 2,695 | ||||||||||||
Goodwill amortisation | (302 | ) | (17 | ) | (5 | ) | (324 | ) | ||||||||
Appraisal value (reduction)/uplift | — | (95 | ) | 296 | 201 | |||||||||||
Net profit attributable to Shareholders of the Bank | 1,874 | 156 | 542 | 2,572 | ||||||||||||
Non-Cash Expenses | ||||||||||||||||
Goodwill amortisation | 302 | 17 | 5 | 324 | ||||||||||||
Charge for bad and doubtful debts | 276 | — | — | 276 | ||||||||||||
Depreciation | 110 | 8 | 9 | 127 | ||||||||||||
Which new Bank initiatives | 427 | — | — | 427 | ||||||||||||
Other | 30 | 50 | 14 | 94 | ||||||||||||
Financial Position | ||||||||||||||||
Total Assets | 269,066 | (1) | 19,878 | 17,051 | (1) | 305,995 | ||||||||||
Acquisition of Property, Plant & Equipment, Intangibles and other Non-current Assets | 518 | 6 | 9 | 533 | ||||||||||||
Associate Investments | 194 | 1 | 44 | 239 | ||||||||||||
Total Liabilities | 254,284 | 17,439 | 9,387 | 281,110 |
(1) | Restated to reflect a restructure and subsequent realignment in business segments. |
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GROUP | ||||||||||||||||
Year Ended 30 June 2003 | ||||||||||||||||
Primary Segment | Funds | |||||||||||||||
Business Segments | Banking | Management | Insurance | Total | ||||||||||||
Financial Performance | $M | $M | $M | $M | ||||||||||||
Interest income | 11,528 | — | — | 11,528 | ||||||||||||
Premium and related revenue | — | — | 1,131 | 1,131 | ||||||||||||
Other income | 2,733 | 1,157 | 620 | 4,510 | ||||||||||||
Total Revenue | 14,261 | 1,157 | 1,751 | 17,169 | ||||||||||||
Interest expense | 6,502 | — | — | 6,502 | ||||||||||||
Segment result before tax, goodwill amortisation and appraisal value uplift | 3,165 | 217 | 161 | 3,543 | ||||||||||||
Income tax expense | (931 | ) | 5 | (32 | ) | (958 | ) | |||||||||
Segment result after income tax and before goodwill amortisation and appraisal value uplift | 2,234 | 222 | 129 | 2,585 | ||||||||||||
Outside equity interest | — | (6 | ) | — | (6 | ) | ||||||||||
Segment result after tax and outside equity interest before goodwill amortisation and appraisal value uplift | 2,234 | 216 | 129 | 2,579 | ||||||||||||
Goodwill amortisation | (300 | ) | (18 | ) | (4 | ) | (322 | ) | ||||||||
Appraisal value uplift/(reduction) | — | (291 | ) | 46 | (245 | ) | ||||||||||
Net profit attributable to Shareholders of the Bank | 1,934 | (93 | ) | 171 | 2,012 | |||||||||||
Non-Cash Expenses | ||||||||||||||||
Goodwill amortisation | 300 | 18 | 4 | 322 | ||||||||||||
Charge for bad and doubtful debts | 305 | — | — | 305 | ||||||||||||
Depreciation | 109 | 8 | 11 | 128 | ||||||||||||
Appraisal value reduction/(uplift) | — | 291 | (46 | ) | 245 | |||||||||||
Other | 112 | 1 | — | 113 | ||||||||||||
Financial Position | ||||||||||||||||
Total Assets | 229,289 | 19,622 | 16,199 | 265,110 | ||||||||||||
Acquisition of Property, Plant & Equipment, Intangibles and other Non-current Assets | 98 | 16 | 6 | 120 | ||||||||||||
Associate Investments | 214 | 12 | 61 | 287 | ||||||||||||
Total Liabilities | 216,939 | 17,044 | 8,975 | 242,958 |
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2005 | 2004 | 2003 | ||||||||||||||||||||||
Secondary Segment | $M | % | $M | % | $M | % | ||||||||||||||||||
Geographical Segments | ||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||
Australia | 20,790 | 79.7 | 17,911 | 80.7 | 14,008 | 81.6 | ||||||||||||||||||
New Zealand | 3,507 | 13.5 | 2,728 | 12.3 | 2,025 | 11.8 | ||||||||||||||||||
Other Countries(1) | 1,781 | 6.8 | 1,563 | 7.0 | 1,136 | 6.6 | ||||||||||||||||||
26,078 | 100.0 | 22,202 | 100.0 | 17,169 | 100.0 | |||||||||||||||||||
Net profit attributable to shareholders of the Bank | ||||||||||||||||||||||||
Australia | 3,223 | 80.7 | 2,091 | 81.3 | 1,659 | 82.4 | ||||||||||||||||||
New Zealand | 509 | 12.8 | 309 | 12.0 | 265 | 13.2 | ||||||||||||||||||
Other Countries(1) | 259 | 6.5 | 172 | 6.7 | 88 | 4.4 | ||||||||||||||||||
3,991 | 100.0 | 2,572 | 100.0 | 2,012 | 100.0 | |||||||||||||||||||
Assets | ||||||||||||||||||||||||
Australia | 271,596 | 82.5 | 252,652 | 82.6 | 221,248 | 83.5 | ||||||||||||||||||
New Zealand | 41,650 | 12.7 | 35,059 | 11.4 | 27,567 | 10.4 | ||||||||||||||||||
Other Countries(1) | 15,789 | 4.8 | 18,284 | 6.0 | 16,295 | 6.1 | ||||||||||||||||||
329,035 | 100.0 | 305,995 | 100.0 | 265,110 | 100.0 | |||||||||||||||||||
Acquisition of Property, Plant & Equipment, Intangibles and other Non-current Assets | ||||||||||||||||||||||||
Australia | 303 | 86.6 | 495 | 92.9 | 98 | 81.7 | ||||||||||||||||||
New Zealand | 37 | 10.6 | 29 | 5.4 | 6 | 5.0 | ||||||||||||||||||
Other Countries(1) | 10 | 2.8 | 9 | 1.7 | 16 | 13.3 | ||||||||||||||||||
350 | 100.0 | 533 | 100.0 | 120 | 100.0 | |||||||||||||||||||
(1) | Other Countries are: | |
United Kingdom, United States of America, Japan, Singapore, Hong Kong, Grand Cayman, Malta, Fiji, Indonesia, China and Vietnam. |
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GROUP | ||||||||
2005 | 2004 | |||||||
Summarised Statement of Financial Performance | $M | $M | ||||||
Premium and related revenue | 1,500 | 1,362 | ||||||
Outward reinsurance premiums expense | (231 | ) | (194 | ) | ||||
Claims expense | (422 | ) | (501 | ) | ||||
Reinsurance recoveries | 122 | 139 | ||||||
Investment revenue (excluding investments in subsidiaries) | ||||||||
Equity securities | 1,635 | 1,582 | ||||||
Debt securities | 795 | 558 | ||||||
Property | 353 | 238 | ||||||
Other | 411 | 399 | ||||||
Life insurance policy liabilities expense | (2,686 | ) | (1,972 | ) | ||||
Margin on services operating income | 1,477 | 1,611 | ||||||
Change in excess of net market values over net assets of life insurance controlled entities | 778 | 201 | ||||||
Life Insurance operating income | 2,255 | 1,812 | ||||||
Administration expense | (787 | ) | (790 | )(1) | ||||
Operating profit before income tax | 1,468 | 1,022 | ||||||
Income tax attributable to operating profit | (314 | ) | (300 | ) | ||||
Operating profit after income tax | 1,154 | 722 | ||||||
Outside equity interest in operating profit after income tax | (5 | ) | (8 | ) | ||||
Net profit after income tax | 1,149 | 714 | ||||||
Sources of life insurance operating profit | ||||||||
The Margin on Services operating profit after income tax is represented by: | ||||||||
Emergence of planned profit margins | 206 | 186 | ||||||
Difference between actual and planned experience | (2 | ) | 6 | |||||
Movement in excess of net market value over net assets of controlled entities | 778 | 201 | ||||||
Reversal of previously recognised losses or loss recognition on groups of related products | — | 10 | ||||||
Investment earnings on assets in excess of policyholder liabilities | 167 | 311 | ||||||
Operating profit after income tax | 1,149 | 714 | ||||||
Life insurance premiums received and receivable | 3,112 | 3,688 | ||||||
Life insurance claims paid and payable | 4,632 | 4,356 |
(1) | In 2004 volume expenses were netted against margin on services operating income. For 2005 these expenses have been shown gross and the comparatives restated for consistency. |
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Life Insurance | ||||||||||||||||||||
Funds | ||||||||||||||||||||
Management | Australia | New Zealand | Asia(1) | Total | ||||||||||||||||
Analysis of Movement since 30 June 2004 | $M | $M | $M | $M | $M | |||||||||||||||
Profits | 349 | 176 | 71 | 50 | 646 | |||||||||||||||
Net capital movements(2) | (121 | ) | 195 | (79 | ) | 1 | (4 | ) | ||||||||||||
Dividends paid | (213 | ) | (485 | ) | — | (4 | ) | (702 | ) | |||||||||||
Acquisitions (3) | (30 | ) | — | — | — | (30 | ) | |||||||||||||
Foreign exchange movements | — | — | 2 | (60 | ) | (58 | ) | |||||||||||||
Change in Shareholders net tangible assets | (15 | ) | (114 | ) | (6 | ) | (13 | ) | (148 | ) | ||||||||||
Acquired excess(3) | 30 | — | — | — | 30 | |||||||||||||||
Net appraisal value uplift/(reduction) | 301 | 333 | 146 | (2 | ) | 778 | ||||||||||||||
Increase/(Decrease) to 30 June 2005 | 316 | 219 | 140 | (15 | ) | 660 | ||||||||||||||
Shareholders’ Net Tangible Assets | ||||||||||||||||||||
30 June 2004 balance | 515 | 1,131 | 415 | 600 | 2,661 | |||||||||||||||
Profits | 349 | 176 | 71 | 50 | 646 | |||||||||||||||
Net capital movements (2) | (121 | ) | 195 | (79 | ) | 1 | (4 | ) | ||||||||||||
Dividends paid | (213 | ) | (485 | ) | — | (4 | ) | (702 | ) | |||||||||||
Acquisitions(3) | (30 | ) | — | — | — | (30 | ) | |||||||||||||
Foreign exchange movements | — | — | 2 | (60 | ) | (58 | ) | |||||||||||||
30 June 2005 balance | 500 | 1,017 | 409 | 587 | 2,513 | |||||||||||||||
Value In Force Business | ||||||||||||||||||||
30 June 2004 balance | 1,850 | 295 | 286 | — | 2,431 | |||||||||||||||
Uplift | 9 | 238 | 73 | — | 320 | |||||||||||||||
30 June 2005 balance | 1,859 | 533 | 359 | — | 2,751 | |||||||||||||||
Value Future New Business | ||||||||||||||||||||
30 June 2004 balance | 2,774 | 235 | 277 | 24 | 3,310 | |||||||||||||||
Acquisitions(3) | 30 | — | — | — | 30 | |||||||||||||||
Uplift/(reduction) | 292 | 95 | 73 | (2 | ) | 458 | ||||||||||||||
30 June 2005 balance | 3,096 | 330 | 350 | 22 | 3,798 | |||||||||||||||
(1) | The Asian life businesses are not held in the market value environment and are carried at net assets plus any excess representing the difference between appraisal value and net assets at the time of acquisition. This excess which effectively represents goodwill is being amortised on a straight line basis over 20 years, subject to impairment. Subject to regulatory approval, the disposal of the Hong Kong life insurance operations will occur subsequent to 30 June 2005. Refer to Note 1 (pp) to the Financial Statements for further information. | |
(2) | Includes capital injections, transfers and movements in intergroup loans. | |
(3) | Represents the purchase of Symmetry Limited. The goodwill on acquisition is reclassified as acquired excess, representing the difference between appraisal value and net assets at the time of acquisition. |
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Life Insurance | ||||||||||||||||||||
Funds | ||||||||||||||||||||
Management | Australia | New Zealand | Asia(1) | Total | ||||||||||||||||
Carrying Value at 30 June 2005 | $M | $M | $M | $M | $M | |||||||||||||||
Shareholders’ net tangible assets | 500 | 1,017 | 409 | 587 | 2,513 | |||||||||||||||
Value in force business | 1,859 | 533 | 359 | — | 2,751 | |||||||||||||||
Embedded value | 2,359 | 1,550 | 768 | 587 | 5,264 | |||||||||||||||
Value future new business | 3,096 | 330 | 350 | 22 | 3,798 | |||||||||||||||
Carrying Value | 5,455 | 1,880 | 1,118 | 609 | 9,062 | |||||||||||||||
(1) | The Asian life businesses are not held in the market value environment and are carried at net assets plus any excess representing the difference between appraisal value and net assets at the time of acquisition. This excess which effectively represents goodwill is being amortised on a straight line basis over 20 years, subject to impairment. Subject to regulatory approval, the disposal of the Hong Kong life insurance operations will occur subsequent to 30 June 2005. Refer to Note 1 (pp) to the Financial Statements for further information. |
§ | An appraisal value uplift of $778 million, reflecting growth in Funds under Administration and improved fund flows, while persistency levels and claims ratios improved across each of the insurance businesses. The uplift also includes the negative impact of continued uncertainty of investment markets and industry funds flows; |
§ | Decrease due to dividends in excess of profits of $56 million; and |
§ | A $62 million decrease in net tangible assets due to net capital and foreign exchange movements. |
2005 | 2004 | |||||||
$M | $M | |||||||
Intangible component of investment in non-consolidated subsidiaries deducted from Tier One capital comprises: | ||||||||
Value future new business | 3,798 | 3,310 | ||||||
Value of self-generated in force business | 1,599 | 1,279 | ||||||
Other (1) | — | 85 | ||||||
5,397 | 4,674 | |||||||
Investment in non-consolidated subsidiaries deducted from Total Capital comprises: | ||||||||
Shareholders’ net tangible assets in life and funds management businesses | 2,513 | 2,661 | ||||||
Capital in other non-consolidated subsidiaries | 348 | 351 | ||||||
Value of acquired in force business | 1,152 | 1,152 | ||||||
Less non-recourse debt | (2,292 | ) | (2,278 | ) | ||||
1,721 | 1,886 | |||||||
(1) | Relates to revised APRT Prudential Standards effective 1 July 2003. |
New | Risk | Value of | ||||||||||
Business | Discount | Franking | ||||||||||
Multiplier | Rate | Credits | ||||||||||
As at 30 June 2005 | % | % | ||||||||||
Life insurance entities | ||||||||||||
Australia | 8 | 10.1 | 70 | |||||||||
New Zealand | 9 | 9.8 | — | |||||||||
Asia | ||||||||||||
- Hong Kong(1) | n/a | n/a | — | |||||||||
- Other | various | various | — | |||||||||
Funds management entities | ||||||||||||
Australia | n/a | 11.7 | 70 |
(1) | Refer Note 1 (pp) for comments relating to the sale of the Hong Kong life insurance entities. |
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New | Risk | Value of | ||||||||||
Business | Discount | Franking | ||||||||||
Multiplier | Rate | Credits | ||||||||||
As at 30 June 2004 | % | % | ||||||||||
Life insurance entities | ||||||||||||
Australia | 8 | 10.9 | 70 | |||||||||
New Zealand | 9 | 10.3 | — | |||||||||
Asia | 8 | 12 | — | |||||||||
- - Hong Kong | 8 | 12 | — | |||||||||
- Other | various | various | — | |||||||||
Funds management entities | ||||||||||||
Australia | n/a | 12.5 | 70 |
2005 | 2004 | |||||||
Components of Policy Liabilities | $M | $M | ||||||
Future policy benefits(1) | 27,790 | 27,779 | ||||||
Future bonuses | 1,385 | 1,346 | ||||||
Future expenses | 1,829 | 1,762 | ||||||
Future profit margins | 1,795 | 1,472 | ||||||
Future charges for acquisition expenses | (540 | ) | (527 | ) | ||||
Balance of future premiums | (7,660 | ) | (7,266 | ) | ||||
Provisions for bonuses not allocated to participating policyholders | 95 | 72 | ||||||
Total Policy Liabilities | 24,694 | 24,638 | ||||||
(1) Including bonuses credited to policyholders in prior years. |
Product Type | Method | Profit Carrier | ||
Individual | ||||
Conventional | Projection | Bonuses or expected claim payments | ||
Investment account | Projection | Bonuses or funds under management | ||
Investment linked | Accumulation | Not applicable | ||
Lump sum risk | Projection | Premiums/expected claim payments | ||
Income stream risk | Projection | Expected claim payments | ||
Immediate annuities | Projection | Annuity payments | ||
Group | ||||
Investment account | Projection | Bonuses or funds under management | ||
Investment linked | Accumulation | Not applicable | ||
Lump sum risk | Accumulation | Not applicable | ||
Income stream risk | Projection | Expected claim payments |
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Discount Rates | ||||||||
June 2005 | June 2004 | |||||||
Class of Business | Rate Range % | Rate Range % | ||||||
Traditional – ordinary business (after tax) | 5.52 – 6.26 | 6.11 – 6.86 | ||||||
Traditional – superannuation business (after tax) | 6.74 – 7.67 | 7.46 – 8.40 | ||||||
Annuity business (after tax) | 4.37 – 6.49 | 6.17 – 6.98 | ||||||
Term insurance – ordinary business (after tax) | 3.58 – 4.36 | 3.45 – 4.15 | ||||||
Term insurance – superannuation business (after tax) | 3.58 – 3.85 | 3.45 – 4.15 | ||||||
Disability business (before tax) | 5.11 – 5.70 | 5.93 | ||||||
Investment linked – ordinary business (after tax) | 4.98 – 6.10 | 5.61 – 6.04 | ||||||
Investment linked – superannuation business (after tax) | 6.50 – 6.71 | 7.37 – 7.42 | ||||||
Investment linked – exempt (after tax) | 7.38 – 7.61 | 8.41 – 8.80 | ||||||
Investment account – ordinary business (after tax) | 3.74 | 4.32 | ||||||
Investment account – superannuation business (after tax) | 4.55 | 5.25 | ||||||
Investment account – exempt (after tax) | 5.31 | 6.13 |
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GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$’000 | $’000 | $’000 | $’000 | |||||||||||||
Amounts paid or due and payable for audit services to: | ||||||||||||||||
Ernst & Young | 7,921 | 6,969 | 4,084 | 2,664 | ||||||||||||
Other Auditors | 114 | 134 | — | — | ||||||||||||
8,035 | 7,103 | 4,084 | 2,664 | |||||||||||||
Amounts paid or due and payable for non-audit services to Ernst & Young: | ||||||||||||||||
Audit related services | 2,077 | 1,858 | 1,664 | 1,022 | ||||||||||||
Taxation services | 16 | 222 | 8 | 136 | ||||||||||||
All other services | ||||||||||||||||
Corporate finance services | — | 203 | — | 203 | ||||||||||||
Staff assistance services | — | 13 | — | 13 | ||||||||||||
Other services | 327 | 569 | 11 | 284 | ||||||||||||
2,420 | (1) | 2,865 | 1,683 | 1,658 | ||||||||||||
Total Remuneration of Auditors | 10,455 | 9,968 | 5,767 | 4,322 | ||||||||||||
4. | (1) An additional amount of $3,305,000 was paid to Ernst & Young by way of fees paid for Non-Audit Services provided to entities not consolidated into the Financial Statements. These relate predominately to audits, reviews, attestations and assurances for managed investment schemes and superannuation funds. | |
5. | ||
6. |
GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Not later than one year | 13 | 44 | 13 | 42 | ||||||||||||
Later than one year but not later than two years | — | 2 | — | — | ||||||||||||
Total Commitments for Capital Expenditure Not Provided for in the Accounts | 13 | 46 | 13 | 42 | ||||||||||||
GROUP | BANK | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Commitments in respect of non cancellable operating lease agreements due: | ||||||||||||||||
Not later than one year | 297 | 295 | 263 | 241 | ||||||||||||
Later than one year but not later than five years | 635 | 646 | 540 | 522 | ||||||||||||
Later than five years | 214 | 207 | 165 | 150 | ||||||||||||
Total Lease Commitments — Property, Plant and Equipment | 1,146 | 1,148 | 968 | 913 | ||||||||||||
Group’s share of lease commitments of associated entities: | ||||||||||||||||
Not later than one year | — | 12 | ||||||||||||||
Later than one year but not later than five years | — | 16 | ||||||||||||||
Total Lease Commitments — Property, Plant and Equipment | — | 28 | ||||||||||||||
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GROUP | ||||||||||||||||
Face Value | Credit Equivalent | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Credit risk related instruments | ||||||||||||||||
Guarantees | 2,438 | 2,230 | 2,438 | 2,230 | ||||||||||||
Standby letters of credit | 321 | 362 | 321 | 362 | ||||||||||||
Bill endorsements | 276 | 308 | 276 | 308 | ||||||||||||
Documentary letters of credit | 185 | 171 | 37 | 34 | ||||||||||||
Performance related contingents | 1,095 | 898 | 547 | 449 | ||||||||||||
Commitments to provide credit | 76,162 | 64,651 | 13,421 | 12,329 | ||||||||||||
Other commitments | 8,279 | 7,158 | 942 | 1,156 | ||||||||||||
Total credit risk related instruments | 88,756 | 75,778 | 17,982 | 16,868 | ||||||||||||
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2005 | 2004 | |||||||
$M | $M | |||||||
Funds under administration | ||||||||
Australia | 77,208 | 67,393 | ||||||
United Kingdom | 11,914 | 10,721 | ||||||
New Zealand | 8,579 | 7,614 | ||||||
Asia | 2,404 | 1,203 | ||||||
100,105 | 86,931 | |||||||
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§ | 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 | ||||||||
2005 | 2004 | |||||||
Market Risk | $M | $M | ||||||
Australia | ||||||||
Cheque accounts | 27,455 | 24,699 | ||||||
Savings accounts | 31,947 | 31,067 | ||||||
Term deposits | 41,582 | 38,530 | ||||||
Cash management accounts | 21,831 | 20,756 | ||||||
Debt issues | 40,240 | 27,688 | ||||||
Bank acceptances | 16,786 | 15,019 | ||||||
Certificates of deposit | 16,041 | 20,516 | ||||||
Life insurance policy liabilities | 20,636 | 20,834 | ||||||
Loan capital | 6,291 | 6,539 | ||||||
Securities sold under agreements to repurchase and short sales | 2,258 | 3,585 | ||||||
Other | 2,708 | 2,383 | ||||||
Total Australia | 227,775 | 211,616 | ||||||
Overseas | ||||||||
Deposits and interbank | 32,230 | 28,282 | ||||||
Commercial paper | 12,266 | 8,776 | ||||||
Life Insurance policy liabilities | 4,058 | 3,804 | ||||||
Other debt issues | 6,115 | 7,578 | ||||||
Loan capital | — | 92 | ||||||
Total Overseas | 54,669 | 48,532 | ||||||
Total Funding Sources | 282,444 | 260,148 | ||||||
Provisions and other liabilities | 20,531 | 20,962 | ||||||
Total Liabilities | 302,975 | 281,110 | ||||||
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(a) | Next 12 months earnings |
(expressed as a percentage of | 2005 | 2004 | ||||||
expected next 12 months' earnings) | % | % | ||||||
Average monthly exposure | 1.1 | 0.9 | ||||||
High month exposure | 1.5 | 1.3 | ||||||
Low month exposure | 0.5 | 0.5 |
(b) | Economic value |
2005 | 2004 | |||||||
$M | $M | |||||||
Exposure as at 30 June | 7 | 19 | ||||||
Average monthly exposure | 24 | 40 | ||||||
High month exposure | 78 | 92 | ||||||
Low month exposure | 5 | 19 |
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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 | 4,464 | 3,181 | — | — | — | — | — | 1,283 | 4.95 | |||||||||||||||||||||||||||
Receivables due from other financial institutions | 3,691 | 2,946 | 559 | 86 | — | — | — | 100 | 3.61 | |||||||||||||||||||||||||||
Trading securities | 11,023 | 11,012 | — | — | — | — | — | 11 | 4.77 | |||||||||||||||||||||||||||
Investment securities | 4,571 | 1,152 | 121 | 289 | 147 | 2,240 | 620 | 2 | 6.01 | |||||||||||||||||||||||||||
Loans, advances and other receivables | 180,641 | 113,110 | 11,792 | 8,633 | 13,169 | 33,107 | 2,097 | (1,267 | ) | 7.25 | ||||||||||||||||||||||||||
Bank acceptances of customers | 16,786 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Life insurance investment assets | 23,124 | 3,145 | 896 | 77 | 364 | 2,505 | 2,156 | 13,981 | 4.67 | |||||||||||||||||||||||||||
Property, plant and equipment | 1,190 | — | — | — | — | — | — | 1,190 | — | |||||||||||||||||||||||||||
Intangible assets | 3,987 | — | — | — | — | — | — | 3,987 | — | |||||||||||||||||||||||||||
Other assets | 22,421 | — | — | — | — | — | — | 22,421 | — | |||||||||||||||||||||||||||
Total Assets | 271,898 | 134,546 | 13,368 | 9,085 | 13,680 | 37,852 | 4,873 | 58,494 | 5.65 | |||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||
Deposits and other public borrowings | 141,114 | 93,701 | 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 | — | |||||||||||||||||||||||||||
Provision for dividend | 14 | — | — | — | — | — | — | 14 | — | |||||||||||||||||||||||||||
Income tax liability | 1,465 | — | — | — | — | — | — | 1,465 | — | |||||||||||||||||||||||||||
Other provisions | 840 | — | — | — | — | — | — | 840 | — | |||||||||||||||||||||||||||
Life insurance policy liabilities | 20,636 | — | — | — | — | — | — | 20,636 | (1) | — | ||||||||||||||||||||||||||
Debt issues | 40,240 | 6,751 | 18,299 | 2,385 | 1,458 | 10,847 | 500 | — | 5.80 | |||||||||||||||||||||||||||
Bills payable and other liabilities | 17,311 | — | — | — | — | — | — | 17,311 | — | |||||||||||||||||||||||||||
Loan capital | 6,291 | 608 | 2,202 | 146 | — | 1,939 | 1,396 | — | 7.13 | |||||||||||||||||||||||||||
Total Liabilities | 247,405 | 103,146 | 42,267 | 15,022 | 5,946 | 16,087 | 2,032 | 62,905 | 3.60 | |||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||
Share capital | 18,846 | — | — | — | — | — | — | 18,846 | ||||||||||||||||||||||||||||
Outside equity interests | 1,270 | — | — | — | — | — | — | 1,270 | ||||||||||||||||||||||||||||
Total Shareholders’ Equity | 20,116 | — | — | — | — | — | — | 20,116 | ||||||||||||||||||||||||||||
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. |
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Repricing Period at 30 June 2004 | ||||||||||||||||||||||||||||||||||||
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 | 5,740 | 4,802 | — | — | 4 | — | — | 934 | 3.27 | |||||||||||||||||||||||||||
Receivables due from other financial institutions | 4,914 | 3,657 | 1,076 | 78 | 2 | — | — | 101 | 2.88 | |||||||||||||||||||||||||||
Trading securities | 11,310 | 11,310 | — | — | — | — | — | — | 3.53 | |||||||||||||||||||||||||||
Investment securities | 3,822 | 81 | 180 | 792 | 17 | 1,966 | 782 | 4 | 6.09 | |||||||||||||||||||||||||||
Loans, advances and other receivables | 158,915 | 96,547 | 10,283 | 8,776 | 14,148 | 28,444 | 1,989 | (1,272 | ) | 6.89 | ||||||||||||||||||||||||||
Bank acceptances of customers | 15,019 | — | — | — | — | — | — | 15,019 | — | |||||||||||||||||||||||||||
Insurance investment assets | 24,673 | 761 | 2,090 | 203 | 247 | 2,934 | 2,514 | 15,924 | 4.62 | |||||||||||||||||||||||||||
Deposits with regulatory authorities | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Property, plant and equipment | 1,053 | — | — | — | — | — | — | 1,053 | — | |||||||||||||||||||||||||||
Intangible assets | 4,270 | — | — | — | — | — | — | 4,270 | — | |||||||||||||||||||||||||||
Other assets | 23,236 | — | — | — | — | — | — | 23,236 | — | |||||||||||||||||||||||||||
Total Assets | 252,952 | 117,158 | 13,629 | 9,849 | 14,418 | 33,344 | 5,285 | 59,269 | 5.16 | |||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||
Deposits and other public borrowings | 139,153 | 90,121 | 20,032 | 14,160 | 3,418 | 3,133 | 826 | 7,463 | 3.89 | |||||||||||||||||||||||||||
Payables due to other financial institutions | 2,383 | 2,147 | 58 | 153 | 4 | 20 | — | 1 | 1.19 | |||||||||||||||||||||||||||
Bank acceptances | 15,019 | — | — | — | — | — | — | 15,019 | — | |||||||||||||||||||||||||||
Provision for dividend | 14 | — | — | — | — | — | — | 14 | — | |||||||||||||||||||||||||||
Income tax liability | 757 | — | — | — | — | — | — | 757 | — | |||||||||||||||||||||||||||
Other provisions | 954 | — | — | — | — | — | — | 954 | — | |||||||||||||||||||||||||||
Insurance policy liabilities | 20,834 | — | — | — | — | — | — | 20,834 | (1) | — | ||||||||||||||||||||||||||
Debt issues | 27,688 | 1,428 | 2,258 | 1,834 | 2,022 | 14,370 | 5,776 | — | 5.27 | |||||||||||||||||||||||||||
Bills payable and other liabilities | 15,802 | — | — | — | — | — | — | 15,802 | — | |||||||||||||||||||||||||||
Loan capital | 6,539 | 331 | 221 | 613 | 999 | 1,825 | 2,550 | — | 4.57 | |||||||||||||||||||||||||||
Total Liabilities | 229,143 | 94,027 | 22,569 | 16,760 | 6,443 | 19,348 | 9,152 | 60,844 | 3.14 | |||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||
Share capital | 21,079 | — | — | — | — | — | — | 21,079 | ||||||||||||||||||||||||||||
Outside equity interests | 2,288 | — | — | — | — | — | — | 2,288 | ||||||||||||||||||||||||||||
Total Shareholders’ Equity | 23,367 | — | — | — | — | — | — | 23,367 | ||||||||||||||||||||||||||||
Off Balance Sheet Items | ||||||||||||||||||||||||||||||||||||
Swaps | (2) | (10,161 | ) | (12,663 | ) | 8,173 | 954 | 8,150 | 5,547 | — | (3) | |||||||||||||||||||||||||
Options | (2) | (426 | ) | — | 176 | — | 75 | 175 | — | (3) | ||||||||||||||||||||||||||
FRAs | (2) | — | — | — | — | — | — | — | (3) | |||||||||||||||||||||||||||
Futures | (2) | — | 5,171 | (10,311 | ) | 6,264 | (902 | ) | (222 | ) | (3) | |||||||||||||||||||||||||
Net Mismatch | (2) | 12,544 | (16,432 | ) | (8,873 | ) | 15,193 | 21,319 | 1,633 | (24,942 | ) | (3) | ||||||||||||||||||||||||
Cumulative Mismatch | (2) | 12,544 | (3,888 | ) | (12,761 | ) | 2,432 | 23,751 | 25,384 | 442 | (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. |
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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 due from other financial institutions | 2,514 | 1,017 | 1,143 | 351 | — | — | — | 3 | 3.60 | |||||||||||||||||||||||||||
Trading securities | 3,605 | 291 | 2,335 | 152 | 97 | 492 | 233 | 5 | 5.81 | |||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||
Life insurance investment assets | 4,713 | 1,005 | 64 | 9 | 25 | 433 | 831 | 2,346 | 2.32 | |||||||||||||||||||||||||||
Deposits with regulatory authorities | 45 | — | — | — | — | — | — | 45 | — | |||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||
Income tax liability | 85 | — | — | — | — | — | — | 85 | — | |||||||||||||||||||||||||||
Other provisions | 41 | — | — | — | — | — | — | 41 | — | |||||||||||||||||||||||||||
Life 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 | 5,425 | — | — | — | — | — | — | 5,425 | ||||||||||||||||||||||||||||
Outside equity 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. |
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Repricing Period at 30 June 2004 | ||||||||||||||||||||||||||||||||||||
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 | 5,740 | 4,802 | — | — | 4 | — | — | 934 | 3.27 | |||||||||||||||||||||||||||
Receivables due from other financial institutions | 4,914 | 3,657 | 1,076 | 78 | 2 | — | — | 101 | 2.88 | |||||||||||||||||||||||||||
Trading securities | 11,310 | 11,310 | — | — | — | — | — | — | 3.53 | |||||||||||||||||||||||||||
Investment securities | 3,822 | 81 | 180 | 792 | 17 | 1,966 | 782 | 4 | 6.09 | |||||||||||||||||||||||||||
Loans, advances and other receivables | 158,915 | 96,547 | 10,283 | 8,776 | 14,148 | 28,444 | 1,989 | (1,272 | ) | 6.89 | ||||||||||||||||||||||||||
Bank acceptances of customers | 15,019 | — | — | — | — | — | — | 15,019 | — | |||||||||||||||||||||||||||
Life insurance investment assets | 24,673 | 761 | 2,090 | 203 | 247 | 2,934 | 2,514 | 15,924 | 4.62 | |||||||||||||||||||||||||||
Property, plant and equipment | 1,053 | — | — | — | — | — | — | 1,053 | — | |||||||||||||||||||||||||||
Goodwill | 4,270 | — | — | — | — | — | — | 4,270 | — | |||||||||||||||||||||||||||
Other assets | 23,236 | — | — | — | — | — | — | 23,236 | — | |||||||||||||||||||||||||||
Total Assets | 252,952 | 117,158 | 13,629 | 9,849 | 14,418 | 33,344 | 5,285 | 59,269 | 5.16 | |||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||
Deposits and other public borrowings | 139,153 | 90,121 | 20,032 | 14,160 | 3,418 | 3,133 | 826 | 7,463 | 3.89 | |||||||||||||||||||||||||||
Payables due to other financial institutions | 2,383 | 2,147 | 58 | 153 | 4 | 20 | — | 1 | 1.19 | |||||||||||||||||||||||||||
Bank acceptances | 15,019 | — | — | — | — | — | — | 15,019 | — | |||||||||||||||||||||||||||
Provision for dividend | 14 | — | — | — | — | — | — | 14 | — | |||||||||||||||||||||||||||
Income tax liability | 757 | — | — | — | — | — | — | 757 | — | |||||||||||||||||||||||||||
Other provisions | 954 | — | — | — | — | — | — | 954 | — | |||||||||||||||||||||||||||
Life insurance policy liabilities | 20,834 | — | — | — | — | — | — | 20,834 | (1) | — | ||||||||||||||||||||||||||
Debt issues | 27,688 | 1,428 | 2,258 | 1,834 | 2,022 | 14,370 | 5,776 | — | 5.27 | |||||||||||||||||||||||||||
Bills payable and other liabilities | 15,802 | — | — | — | — | — | — | 15,802 | — | |||||||||||||||||||||||||||
Loan capital | 6,539 | 331 | 221 | 613 | 999 | 1,825 | 2,550 | — | 4.57 | |||||||||||||||||||||||||||
Total Liabilities | 229,143 | 94,027 | 22,569 | 16,760 | 6,443 | 19,348 | 9,152 | 60,844 | 3.14 | |||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||
Share capital | 21,079 | — | — | — | — | — | — | 21,079 | ||||||||||||||||||||||||||||
Outside equity interests | 2,288 | — | — | — | — | — | — | 2,288 | ||||||||||||||||||||||||||||
Total Shareholders’ Equity | 23,367 | — | — | — | — | — | — | 23,367 | ||||||||||||||||||||||||||||
Off Balance Sheet Items | ||||||||||||||||||||||||||||||||||||
Swaps | (2) | (10,161 | ) | (12,663 | ) | 8,173 | 954 | 8,150 | 5,547 | — | (3) | |||||||||||||||||||||||||
Options | (2) | (426 | ) | — | 176 | — | 75 | 175 | — | (3) | ||||||||||||||||||||||||||
Futures | (2) | — | 5,171 | (10,311 | ) | 6,264 | (902 | ) | (222 | ) | — | (3) | ||||||||||||||||||||||||
Net Mismatch | (2) | 12,544 | (16,432 | ) | (8,873 | ) | 15,193 | 21,319 | 1,633 | (24,942 | ) | (3) | ||||||||||||||||||||||||
Cumulative Mismatch | (2) | 12,544 | (3,888 | ) | (12,761 | ) | 2,432 | 23,751 | 25,384 | 442 | (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. |
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Repricing Period at 30 June 2004 | ||||||||||||||||||||||||||||||||||||
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 | 713 | 493 | 116 | — | 30 | — | — | 74 | 2.23 | |||||||||||||||||||||||||||
Receivables due from other financial institutions | 3,455 | 2,005 | 1,423 | 15 | — | — | — | 12 | 3.20 | |||||||||||||||||||||||||||
Trading securities | 3,586 | 2,021 | 1,237 | 221 | 60 | 25 | 22 | — | 4.29 | |||||||||||||||||||||||||||
Investment securities | 7,625 | 827 | 2,193 | 622 | 374 | 1,843 | 1,766 | — | 4.00 | |||||||||||||||||||||||||||
Loans, advances and other receivables | 30,476 | 10,868 | 2,671 | 2,616 | 4,233 | 9,509 | 700 | (121 | ) | 6.87 | ||||||||||||||||||||||||||
Life insurance investment assets | 4,269 | 67 | 54 | 32 | 71 | 990 | 955 | 2,100 | 2.11 | |||||||||||||||||||||||||||
Deposits with regulatory authorities | 38 | — | — | — | — | — | — | 38 | — | |||||||||||||||||||||||||||
Property, plant and equipment | 151 | — | — | — | — | — | — | 151 | — | |||||||||||||||||||||||||||
Goodwill | 435 | — | — | — | — | — | — | 435 | — | |||||||||||||||||||||||||||
Other assets | 2,295 | — | — | — | — | — | — | 2,295 | — | |||||||||||||||||||||||||||
Total Assets | 53,043 | 16,281 | 7,694 | 3,506 | 4,768 | 12,367 | 3,443 | 4,984 | 5.22 | |||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||
Deposits and other public borrowings | 24,024 | 14,697 | 4,636 | 2,605 | 1,095 | 515 | 14 | 462 | 4.22 | |||||||||||||||||||||||||||
Payables due to other financial institutions | 4,258 | 2,844 | 928 | 485 | 1 | — | — | — | 2.80 | |||||||||||||||||||||||||||
Income tax liability | 54 | — | — | — | — | — | — | 54 | — | |||||||||||||||||||||||||||
Other provisions | 43 | — | — | — | — | — | — | 43 | — | |||||||||||||||||||||||||||
Life insurance policy liabilities | 3,804 | — | — | — | — | — | — | 3,804 | (1) | — | ||||||||||||||||||||||||||
Debt issues | 16,354 | 2,919 | 2,411 | 8,504 | 328 | 1,664 | 481 | 47 | 1.72 | |||||||||||||||||||||||||||
Bills payable and other liabilities | 3,338 | — | — | — | — | — | — | 3,338 | — | |||||||||||||||||||||||||||
Loan capital | 92 | — | — | 92 | — | — | — | — | 8.22 | |||||||||||||||||||||||||||
Total Liabilities | 51,967 | 20,460 | 7,975 | 11,686 | 1,424 | 2,179 | 495 | 7,748 | 2.74 | |||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||
Share capital | 1,326 | — | — | — | — | — | — | 1,326 | ||||||||||||||||||||||||||||
Outside equity interests | 192 | — | — | — | — | — | — | 192 | ||||||||||||||||||||||||||||
Total Shareholders’ Equity | 1,518 | — | — | — | — | — | — | 1,518 | ||||||||||||||||||||||||||||
Off Balance Sheet Items | ||||||||||||||||||||||||||||||||||||
Options | (2) | 3,273 | 5,205 | (186 | ) | (2,073 | ) | (6,381 | ) | 115 | 47 | (3) | ||||||||||||||||||||||||
Swaps | (2) | — | — | (61 | ) | 61 | — | — | — | (3) | ||||||||||||||||||||||||||
FRAs | (2) | (820 | ) | (137 | ) | 547 | 410 | — | — | — | (3) | |||||||||||||||||||||||||
Futures | (2) | — | 218 | (185 | ) | 526 | (559 | ) | — | — | (3) | |||||||||||||||||||||||||
Net Mismatch | (2) | (1,726 | ) | 5,005 | (8,065 | ) | 2,268 | 3,248 | 3,063 | (4,235 | ) | (3) | ||||||||||||||||||||||||
Cumulative Mismatch | (2) | (1,726 | ) | 3,279 | (4,786 | ) | (2,518 | ) | 730 | 3,793 | (442 | ) | (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. |
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Exchange Rate | Interest Rate | ||||||||||||||||||||||||||
Related Contracts | Related Contracts | Total | |||||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||||||||
As at 30 June | $M | $M | $M | $M | $M | $M | |||||||||||||||||||||
Within 6 months | (8 | ) | 99 | (51 | ) | (34 | ) | (59 | ) | 65 | |||||||||||||||||
Within 6 months - 1 year | (7 | ) | 4 | 17 | (13 | ) | 10 | (9 | ) | ||||||||||||||||||
Within 1 - 2 years | 29 | (21 | ) | (20 | ) | 16 | 9 | (5 | ) | ||||||||||||||||||
Within 2 - 5 years | 34 | 59 | (208 | ) | (190 | ) | (174 | ) | (131 | ) | |||||||||||||||||
After 5 years | 65 | 7 | (87 | ) | (698 | ) | (22 | ) | (691 | ) | |||||||||||||||||
Net deferred gain/(loss) | 113 | 148 | (349 | ) | (919 | ) | (236 | ) | (771 | ) | |||||||||||||||||
§ | 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 Bank’s market presence and expertise. |
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GROUP | ||||||||||||||||
Face Value | Credit Equivalent | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Derivatives | ||||||||||||||||
Exchange rate related contracts | ||||||||||||||||
Forwards | ||||||||||||||||
Trading | 164,491 | 151,595 | 3,542 | 3,083 | ||||||||||||
Other than trading | 31,776 | 30,983 | 786 | 1,504 | ||||||||||||
Total Forwards | 196,267 | 182,578 | 4,328 | 4,587 | ||||||||||||
Swaps | ||||||||||||||||
Trading(1) | 85,978 | 61,688 | 7,439 | 5,242 | ||||||||||||
Other than trading | 46,969 | 38,671 | 2,165 | 2,855 | ||||||||||||
Total Swaps | 132,947 | 100,359 | 9,604 | 8,097 | ||||||||||||
Futures | ||||||||||||||||
Trading | 25 | 1 | — | — | ||||||||||||
Other than trading | — | — | — | — | ||||||||||||
Total Futures | 25 | 1 | — | — | ||||||||||||
Options purchased and sold | ||||||||||||||||
Trading | 21,523 | 64,930 | 304 | 856 | ||||||||||||
Other than trading | 141 | 126 | 5 | 2 | ||||||||||||
Total Options Purchased and Sold | 21,664 | 65,056 | 309 | 858 | ||||||||||||
Total Exchange Rate Related Contracts | 350,903 | 347,994 | 14,241 | 13,542 | ||||||||||||
Interest rate related contracts | ||||||||||||||||
Forwards | ||||||||||||||||
Trading | 25,312 | 28,311 | 6 | 13 | ||||||||||||
Other than trading | 120 | 500 | 2 | 11 | ||||||||||||
Total Forwards | 25,432 | 28,811 | 8 | 24 | ||||||||||||
Swaps | ||||||||||||||||
Trading (1) | 273,456 | 139,297 | 3,185 | 2,276 | ||||||||||||
Other than trading | 146,799 | 201,510 | 2,843 | 3,033 | ||||||||||||
Total Swaps | 420,255 | 340,807 | 6,028 | 5,309 | ||||||||||||
Futures | ||||||||||||||||
Trading | 44,362 | 38,525 | — | 67 | ||||||||||||
Other than trading | 14,558 | 17,251 | 249 | — | ||||||||||||
Total Futures | 58,920 | 55,776 | 249 | 67 | ||||||||||||
Options purchased and sold | ||||||||||||||||
Trading | 26,659 | 15,100 | 185 | 110 | ||||||||||||
Other than trading | 4,098 | 4,683 | 43 | 15 | ||||||||||||
Total Options Purchased and Sold | 30,757 | 19,783 | 228 | 125 | ||||||||||||
Total Interest Rate Related Contracts | 535,364 | 445,177 | 6,513 | 5,525 | ||||||||||||
Credit risk related contracts | ||||||||||||||||
Swaps | ||||||||||||||||
Trading | 3,002 | 2,870 | 250 | 348 | ||||||||||||
Other than trading | 3,972 | 3,490 | 290 | 393 | ||||||||||||
Total Swaps | 6,974 | 6,360 | 540 | 741 | ||||||||||||
Total Credit Risk Related Contracts | 6,974 | 6,360 | 540 | 741 | ||||||||||||
Equity risk related contracts | ||||||||||||||||
Swaps | ||||||||||||||||
Other than trading | 276 | 340 | 44 | 33 | ||||||||||||
Futures | ||||||||||||||||
Other than trading | 115 | — | 115 | — | ||||||||||||
Options purchased and sold | ||||||||||||||||
Trading | 395 | 313 | 27 | 33 | ||||||||||||
Other than trading | 29 | 25 | 3 | 1 | ||||||||||||
Total Options Purchased and Sold | 424 | 338 | 30 | 34 | ||||||||||||
Total Equity Risk Related Contracts | 815 | 678 | 189 | 67 | ||||||||||||
Total Derivatives Exposures | 894,056 | 800,209 | 21,483 | 19,875 | ||||||||||||
(1) | Derivative book restructured to meet AIFRS hedging guidelines. |
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Fair Value | Average Fair Value | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Exchange rate related contracts | ||||||||||||||||
Forward contracts: | ||||||||||||||||
Gross unrealised gains | 1,532 | 2,417 | 2,147 | 2,673 | ||||||||||||
Gross unrealised losses | (1,686 | ) | (2,742 | ) | (2,306 | ) | (2,975 | ) | ||||||||
(154 | ) | (325 | ) | (159 | ) | (302 | ) | |||||||||
Swaps: | ||||||||||||||||
Gross unrealised gains | 6,602 | 5,718 | 6,409 | 5,370 | ||||||||||||
Gross unrealised losses | (6,177 | ) | (4,335 | ) | (5,382 | ) | (4,145 | ) | ||||||||
425 | 1,383 | 1,027 | 1,225 | |||||||||||||
Futures: | ||||||||||||||||
Gross unrealised gains | 1 | — | 1 | 1 | ||||||||||||
Gross unrealised losses | — | (3 | ) | (1 | ) | (3 | ) | |||||||||
1 | (3 | ) | — | (2 | ) | |||||||||||
Options purchased and sold: | ||||||||||||||||
Gross unrealised gains | 146 | 482 | 262 | 822 | ||||||||||||
Gross unrealised losses | (191 | ) | (634 | ) | (351 | ) | (1,167 | ) | ||||||||
(45 | ) | (152 | ) | (89 | ) | (345 | ) | |||||||||
Net Unrealised Gains on Exchange Rate Related Contracts | 228 | 903 | 779 | 576 | ||||||||||||
Interest rate related contracts | ||||||||||||||||
Forward contracts: | ||||||||||||||||
Gross unrealised gains | 2 | 4 | 6 | 6 | ||||||||||||
Gross unrealised losses | (2 | ) | (4 | ) | (5 | ) | (5 | ) | ||||||||
— | — | 1 | 1 | |||||||||||||
Swaps: | ||||||||||||||||
Gross unrealised gains | 3,727 | 4,084 | 3,538 | 4,833 | ||||||||||||
Gross unrealised losses | (3,761 | ) | (4,362 | ) | (3,792 | ) | (5,209 | ) | ||||||||
(34 | ) | (278 | ) | (254 | ) | (376 | ) | |||||||||
Futures: | ||||||||||||||||
Gross unrealised gains | 10 | 24 | 14 | 41 | ||||||||||||
Gross unrealised losses | (28 | ) | (25 | ) | (15 | ) | (50 | ) | ||||||||
(18 | ) | (1 | ) | (1 | ) | (9 | ) | |||||||||
Options purchased and sold: | ||||||||||||||||
Gross unrealised gains | 108 | 66 | 74 | 155 | ||||||||||||
Gross unrealised losses | (50 | ) | (57 | ) | (48 | ) | (123 | ) | ||||||||
58 | 9 | 26 | 32 | |||||||||||||
Net Unrealised Losses on Interest Rate Related Contracts | 6 | (270 | ) | (228 | ) | (352 | ) | |||||||||
Credit related trading derivative contracts | ||||||||||||||||
Swaps: | ||||||||||||||||
Gross unrealised gains | 4 | 17 | 7 | 16 | ||||||||||||
Gross unrealised losses | (8 | ) | (11 | ) | (12 | ) | (13 | ) | ||||||||
Net Unrealised Gains on Credit Related Contracts | (4 | ) | 6 | (5 | ) | 3 | ||||||||||
Equity related contracts | ||||||||||||||||
Options purchased and sold: | ||||||||||||||||
Gross unrealised gains | 13 | 15 | 13 | 12 | ||||||||||||
Gross unrealised losses | (13 | ) | (15 | ) | (13 | ) | (12 | ) | ||||||||
Net Unrealised Gains on Equity Related Contracts | — | — | — | — | ||||||||||||
Net Unrealised Gains on Trading Derivative Contracts | 230 | 639 | 546 | 227 | ||||||||||||
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Fair Value | ||||||||
2005 | 2004 | |||||||
$M | $M | |||||||
8. | ||||||||
Unrealised gains on trading derivatives (Note 21) | 12,144 | 12,827 | ||||||
Unrealised losses on trading derivatives (Note 27) | 11,914 | 12,188 | ||||||
Net unrealised gains on trading derivatives | 230 | 639 | ||||||
Date of Last | ||||||
Actuarial Review of | ||||||
Name of Plan | Type | Form of Benefit | the Fund | |||
Officers’ Superannuation Fund (“OSF”) | Defined Benefits and Accumulation | Indexed pensions and lump sums | 30 June 2003 | |||
Commonwealth Bank of Australia (UK) Staff Benefits Scheme (“CBA(UK)SBS”) | Defined Benefits and Accumulation | Indexed pensions and lump sums | 1 August 2003 | |||
CBA | ||||||||||||
(UK)(2) | ||||||||||||
OSF(1) | SBS | Total | ||||||||||
$M | $M | $M | ||||||||||
Net Market Value of Assets(3) | 5,761 | 311 | 6,072 | |||||||||
Present Value of Accrued Benefits(4) | 4,073 | 384 | 4,457 | |||||||||
Difference between Net Market of Assets And Present Value of Accrued Benefits | 1,688 | (73 | ) | 1,615 | ||||||||
Difference as a percentage of plan assets | 29 | % | 23 | % | 27 | % | ||||||
Value of Vested Benefits(4) | 4,073 | 284 | 4,357 | |||||||||
(1) | The values for the OSF are the fund actuary’s estimates as at 31 March 2005 (which are unaudited). | |
(2) | The values for the CBA(UK)SBS are the fund actuary’s estimates as at 31 March 2005 (which are unaudited). | |
(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 Standards AAS 25 Financial Reporting for 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. |
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Extent of Beneficial | ||||||||
Entity Name | Interest if not 100% | Incorporated in | ||||||
AUSTRALIA | ||||||||
(a) Banking | ||||||||
Commonwealth Bank of Australia | Australia | |||||||
Controlled Entities: | ||||||||
Commonwealth Development Bank of Australia Limited | Australia | |||||||
CBA Investments Limited | Australia | |||||||
CBA Specialised Financing Limited | Australia | |||||||
Share Investments Pty Limited | 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 | |||||||
Chullora Equity Investments (No.2) Pty Limited | Australia | |||||||
Chullora Equity Investments (No.3) Pty Limited | Australia | |||||||
Commonwealth Investments Pty Limited | Australia | |||||||
Commonwealth Property Limited | Australia | |||||||
Infravest (No.1) Limited | Australia | |||||||
Retail Investor Pty Limited | Australia | |||||||
Sparad (No.24) Pty Limited | Australia | |||||||
Colonial Employee Share Plan Limited | Australia | |||||||
Colonial Finance Limited | Australia | |||||||
Colonial Financial Services Pty Limited | Australia | |||||||
CST Securitisation Management Limited | Australia | |||||||
Emerald Holding Company Limited | Australia | |||||||
TD Waterhouse Holdings (Aust) Pty Limited | Australia | |||||||
Preferred Capital Limited | Australia | |||||||
Newport Limited | Australia | |||||||
Padang Pty Ltd | Australia | |||||||
M Land Pty Ltd | Australia | |||||||
PERLS II Trust | Australia | |||||||
GT Funding No.1 Pty Ltd | Australia | |||||||
GT Operating No.1 Pty Ltd | Australia | |||||||
Watermark Limited | Australia | |||||||
Emerald Limited | Australia | |||||||
Loft No.1 Pty Ltd | Australia | |||||||
Loft No.2 Pty Ltd | Australia | |||||||
Fringe Pty Ltd | Australia | |||||||
Reliance Achiever Pty Ltd | Australia | |||||||
Reliance Achiever Partnership | Australia | |||||||
Lily Pty Ltd | Australia | |||||||
Pavillion Limited | Australia | |||||||
Leaseway Transportation Pty Limited | Australia | |||||||
Medallion 2003-2G | Australia | |||||||
Broadcasting Infrastructure Asset Partnership | Australia | |||||||
Greenwood Lending Pty Ltd | Australia |
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Extent of Beneficial | ||||||||
Entity Name | Interest if not 100% | Incorporated in | ||||||
(b) Insurance and Funds Management | ||||||||
Commonwealth Insurance Limited | Australia | |||||||
Commonwealth Custodial Services Limited | Australia | |||||||
Commonwealth Insurance Holdings Limited | Australia | |||||||
Commonwealth Life Limited | Australia | |||||||
CLL Investments Limited | Australia | |||||||
CIF (Hazelwood) Pty Limited | Australia | |||||||
Commonwealth Investment Services Limited Group | ||||||||
Commonwealth Investment Services Limited | Australia | |||||||
Commonwealth Managed Investments Limited | Australia | |||||||
CISL (Hazelwood) Pty Limited | Australia | |||||||
Commonwealth Funds Management Limited Group | ||||||||
Commonwealth Funds Management Limited | Australia | |||||||
CFM (ADF) Limited | Australia | |||||||
CFML Nominees Pty Limited | Australia | |||||||
CMG Asia Pty Limited | Australia | |||||||
CMG First State Investment Managers (Asia) Limited | Australia | |||||||
Colonial AFS Services Pty Limited | Australia | |||||||
Colonial Financial Corporation 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 | 60 | Australia | ||||||
Colonial First State Property Retail Trust | 60 | Australia | ||||||
Colonial First Statutory Funds Management Limited | Australia | |||||||
CFS Managed Property Limited | Australia | |||||||
Colonial Holding Company Pty Limited | Australia | |||||||
Colonial Holding Company (No.2) Pty Limited | Australia | |||||||
Colonial Financial Management Limited | Australia | |||||||
Colonial International Holdings Pty Limited | Australia | |||||||
Colonial Investments Holding Pty Limited | Australia | |||||||
Colonial Investment Services Limited | Australia | |||||||
Colonial LGA Holdings Limited | Australia | |||||||
The Colonial Mutual Life Assurance Society Limited | Australia | |||||||
Colonial Portfolio Services Limited | Australia | |||||||
Colonial Services Pty Limited | Australia | |||||||
Jacques Martin Pty Limited | Australia | |||||||
PIF Managed Property Pty Limited | Australia | |||||||
Colonial Protection Insurance Pty Ltd | Australia | |||||||
NEW ZEALAND | ||||||||
(a) Banking | ||||||||
ASB Group Limited | New Zealand | |||||||
ASB Holdings Limited | New Zealand | |||||||
ASB Bank Limited | New Zealand | |||||||
ASB Finance Limited | New Zealand | |||||||
ASB Management Services Limited | New Zealand | |||||||
ASB Properties Limited | New Zealand | |||||||
ASB Superannuation Nominees Limited | New Zealand | |||||||
CBA Funding (NZ) Limited | New Zealand | |||||||
ASB Capital No.2 | New Zealand | |||||||
(b) Insurance and Funds Management | ||||||||
ASB Group Limited | New Zealand | |||||||
ASB Life Limited | New Zealand | |||||||
Sovereign Limited | New Zealand | |||||||
Colonial First State Investment Managers (NZ) Limited | New Zealand | |||||||
Colonial First State Investments (NZ) Limited | New Zealand | |||||||
ASB Group (Life) Limited | New Zealand | |||||||
Kiwi Income Properties Limited | New Zealand | |||||||
Kiwi Property Management Limited | New Zealand | |||||||
Sovereign Life NZ Limited | New Zealand | |||||||
Sovereign Services Corporation New Zealand Limited | New Zealand |
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Extent of Beneficial | ||||
Entity Name | Interest if not 100% | Incorporated in | ||
OTHER OVERSEAS | ||||
(a) Banking | ||||
CBA Asia Limited | Singapore | |||
CBA (Europe) Finance Limited | United Kingdom | |||
CBA (Delaware) Finance Incorporated | USA | |||
CTB Australia Limited | Hong Kong | |||
Senator House Investments (UK) Limited(1) | United Kingdom | |||
Commonwealth Securities (Japan) Pty Limited | Japan | |||
National Bank of Fiji Limited | 51 | Fiji | ||
PT Bank Commonwealth | Indonesia | |||
CBA Capital Holdings Inc | USA | |||
CBA Capital Trust 1 | USA | |||
CBA Funding Trust 1 | USA | |||
Seahorse Investments UK Ltd | United Kingdom | |||
CommInternational Limited | Malta | |||
CommFinance Limited | Malta | |||
Pontoon | United Kingdom | |||
Quay (Funding) PLC | United Kingdom | |||
Burdekin Investments | Cayman Islands | |||
(b) Insurance and Funds Management | ||||
CMG Asia Life Holdings Limited | Bermuda | |||
CMG Asia Limited | Bermuda | |||
CMG Asia Pensions and Retirements Limited | Hong Kong | |||
CMG First State Investments (Hong Kong) Limited | Hong Kong | |||
CMG First State Singapore Limited | Singapore | |||
Colonial Fiji Life Limited | Fiji | |||
Colonial First State International Assets Limited | United Kingdom | |||
Colonial First State Investments (Fiji) Limited | Fiji | |||
Colonial First State Investment Managers (UK) Limited | United Kingdom | |||
Colonial Healthcare (Fiji) Limited | Fiji | |||
Colonial Services (Fiji) Limited | Fiji | |||
Colonial First State UK Holdings Limited | United Kingdom | |||
Stewart Ivory Holdings Limited | United Kingdom | |||
Waterloo & Victoria Limited | Cayman Islands | |||
First State (HK) LLC | United States | |||
FS Invest Hldgs (Singapore) Ltd | Singapore |
(1) | Wholly owned subsidiary of Newport Limited |
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Extent of | ||||||||||||||||
GROUP | Ownership | |||||||||||||||
2005 | 2004 | Interest | Balance | |||||||||||||
$M | $M | % | Principal Activities | Date | ||||||||||||
EDS (Australia) Pty Limited(1) | — | 193 | 35 | Information Technology | 31 December | |||||||||||
Services | ||||||||||||||||
PT Astra CMG Life | 10 | 12 | 50 | Life insurance - Indonesia | 31 December | |||||||||||
Allday Enterprises Ltd | 1 | 1 | 30 | Financial Services | 31 December | |||||||||||
China Life CMG Life Assurance Company Limited(2) | 10 | 20 | 49 | Life insurance - China | 31 December | |||||||||||
Bao Minh CMG Life Insurance Company | 12 | 12 | 50 | Life insurance - Vietnam | 31 December | |||||||||||
CMG CH China Funds Management Limited | 1 | 1 | 50 | Investment Management | 31 March | |||||||||||
BAC Airports Pty Ltd | 18 | — | 33 | Airport Services | 30 June | |||||||||||
Total | 52 | 239 | ||||||||||||||
(1) | Investment sold in May 2005. | |
(2) | Equity accounted loss of $10 million principally relates to a write-off of capitalised start up costs. |
GROUP | ||||||||
2005 | 2004 | |||||||
$M | $M | |||||||
Share of associates’ profits/(losses) after notional goodwill amortisation | ||||||||
Operating profits/(losses) before income tax | 7 | (44 | ) | |||||
Income tax benefit | (2 | ) | 12 | |||||
Operating profits/(losses) after income tax | 5 | (32 | ) | |||||
Carrying amount of investments in associated entities | ||||||||
Opening balance | 239 | 287 | ||||||
New investments | 20 | — | ||||||
Disposals/transfers | (203 | ) | — | |||||
Writedown value of investments | (10 | ) | (16 | ) | ||||
Share of associates’ profits/(losses) | 5 | (32 | ) | |||||
Closing Balance | 52 | 239 | ||||||
GROUP | ||||||||||||||||
Available | Unused | Available | Unused | |||||||||||||
2005 | 2005 | 2004 | 2004 | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Financing arrangements accessible | ||||||||||||||||
Bank overdraft | 70 | 51 | 70 | 58 | ||||||||||||
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GROUP | BANK | |||||||||||||||||||
2005 | 2004 | 2003 | 2005 | 2004 | ||||||||||||||||
$M | $M | $M | $M | $M | ||||||||||||||||
Note (a) Reconciliation of Cash | ||||||||||||||||||||
Notes, coins and cash at bankers | 1,559 | 1,548 | 1,492 | 1,318 | 1,421 | |||||||||||||||
Other short term liquid assets | 682 | 440 | 641 | 415 | 233 | |||||||||||||||
Receivables due from other financial institutions — at call | 2,893 | 4,124 | 2,528 | 2,737 | 3,230 | |||||||||||||||
Payables due to other financial institutions — at call | (4,199 | ) | (3,266 | ) | (3,233 | ) | (4,156 | ) | (3,245 | ) | ||||||||||
Cash and Cash Equivalents at end of year | 935 | 2,846 | 1,428 | 314 | 1,639 | |||||||||||||||
§ | Customer deposits to and withdrawals from deposit; |
§ | Accounts, borrowings and repayments on loans, advances and other receivables; |
§ | Sales and purchases of trading securities; and |
§ | Proceeds from and repayment of short term debt issues. |
GROUP | BANK | |||||||||||||||||||
Note (c) Reconciliation of Operating Profit After | 2005 | 2004 | 2003 | 2005 | 2004 | |||||||||||||||
Income Tax to Net Cash Provided by Operating Activities | $M | $M | $M | $M | $M | |||||||||||||||
Net profit after income tax | 4,001 | 2,581 | 2,018 | 2,921 | 1,647 | |||||||||||||||
Decrease/(increase) in interest receivable | 11 | (186 | ) | (78 | ) | (256 | ) | (8 | ) | |||||||||||
Increase/(decrease) in interest payable | 30 | 334 | 62 | 86 | 298 | |||||||||||||||
Net decrease /(increase) in trading securities | 318 | (4,324 | ) | (2,484 | ) | 505 | (4,672 | ) | ||||||||||||
Net (gain)/loss on sale of investment securities | (8 | ) | (2 | ) | 9 | (4 | ) | (2 | ) | |||||||||||
(Gain)/loss on sale of property, plant and equipment | (4 | ) | 11 | (22 | ) | (4 | ) | 10 | ||||||||||||
Net loss/(gain) on sale of controlled entities and associates | 13 | (43 | ) | — | 35 | 453 | ||||||||||||||
Charge for bad and doubtful debts | 322 | 276 | 305 | 292 | 263 | |||||||||||||||
Depreciation and amortisation | 475 | 450 | 450 | 281 | 271 | |||||||||||||||
(Decrease)/increase in other provisions | (116 | ) | 185 | (15 | ) | (110 | ) | 143 | ||||||||||||
Increase/(decrease) in income taxes payable | 406 | (36 | ) | (234 | ) | 406 | (7 | ) | ||||||||||||
(Decrease)/increase in deferred income taxes payable | 332 | (29 | ) | (166 | ) | 232 | 323 | |||||||||||||
(Increase)/decrease in future income tax benefits | (86 | ) | (39 | ) | 100 | (337 | ) | (532 | ) | |||||||||||
(Increase)/decrease in accrued fees/reimbursements receivable | (41 | ) | (107 | ) | (94 | ) | 94 | (334 | ) | |||||||||||
(Decrease)/increase in accrued fees and other items payable | 104 | 412 | 6 | 31 | 262 | |||||||||||||||
Amortisation of premium on investment securities | (4 | ) | 12 | 6 | (4 | ) | 11 | |||||||||||||
Unrealised loss/(gain) on revaluation of trading securities | 408 | (260 | ) | (269 | ) | 454 | (264 | ) | ||||||||||||
Change in excess of net market value over net assets of life insurance controlled entities | (778 | ) | (201 | ) | 245 | — | — | |||||||||||||
Change in policy liabilities | 56 | 777 | (2,056 | ) | — | — | ||||||||||||||
Revaluation of life insurance assets | (665 | ) | (1,430 | ) | 164 | — | — | |||||||||||||
Gain on sale of life insurance assets | (592 | ) | (456 | ) | (154 | ) | — | — | ||||||||||||
Other | 187 | (296 | ) | 82 | 25 | (12 | ) | |||||||||||||
Net Cash provided by/(used in) Operating Activities | 4,369 | (2,371 | ) | (2,125 | ) | 4,647 | (2,150 | ) | ||||||||||||
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2005 | 2004 | 2003 | ||||||||||
$M | $M | $M | ||||||||||
Consideration | ||||||||||||
Cash paid on acquisitions | 44 | — | 71 | |||||||||
Pre-acquisition dividend received | — | — | 2 | |||||||||
44 | 73 | |||||||||||
Fair value of net tangible assets acquired | ||||||||||||
Cash & liquid assets | 4 | — | 29 | |||||||||
Other assets | 4 | — | 29 | |||||||||
Other provisions | (2 | ) | — | (8 | ) | |||||||
Bills payable and other liabilities | (6 | ) | — | (33 | ) | |||||||
— | — | 17 | ||||||||||
Excess market value over net assets of life insurance subsidiary | 30 | — | 26 | |||||||||
Goodwill | 14 | — | 30 | |||||||||
44 | — | 73 | ||||||||||
Outflow/(inflows) of cash on acquisitions | ||||||||||||
Cash payments | 44 | — | 71 | |||||||||
Less cash and cash equivalents acquired | (4 | ) | — | (29 | ) | |||||||
40 | — | 42 | ||||||||||
2005 | 2004 | 2003 | ||||||||||
$M | $M | $M | ||||||||||
Disposal proceeds | ||||||||||||
Cash receipt on disposal | — | 63 | 33 | |||||||||
— | 63 | 33 | ||||||||||
Fair value of net tangible assets disposed | ||||||||||||
Net book value of assets disposed | — | 20 | 65 | |||||||||
Profit/(loss) on sale | — | 43 | (32 | ) | ||||||||
— | 63 | 33 | ||||||||||
Inflow of cash from disposal | ||||||||||||
Cash proceeds | — | 63 | 33 | |||||||||
— | 63 | 33 | ||||||||||
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2005 | 2004 | |||||||||||||||
Carrying | Net Fair | Carrying | Net Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
$M | $M | $M | $M | |||||||||||||
Assets | ||||||||||||||||
Cash and liquid assets | 5,715 | 5,715 | 6,453 | 6,453 | ||||||||||||
Receivables due from other financial institutions | 6,205 | 6,205 | 8,369 | 8,369 | ||||||||||||
Trading securities | 14,628 | 14,628 | 14,896 | 14,896 | ||||||||||||
Investment securities | 10,272 | 10,433 | 11,447 | 11,490 | ||||||||||||
Loans, advances and other receivables | 217,516 | 218,037 | 189,391 | 188,954 | ||||||||||||
Bank acceptances of customers | 16,786 | 16,786 | 15,019 | 15,019 | ||||||||||||
Life insurance investment assets | 27,837 | 27,837 | 28,942 | 28,942 | ||||||||||||
Deposit accounts with regulatory authorities | 45 | 45 | 38 | 38 | ||||||||||||
Other assets | 23,452 | 23,470 | 24,721 | 24,721 | ||||||||||||
Liabilities | ||||||||||||||||
Deposits and other public borrowings | 168,029 | 168,565 | 163,177 | 163,645 | ||||||||||||
Payables due to other financial institutions | 8,023 | 8,023 | 6,641 | 6,641 | ||||||||||||
Bank acceptances | 16,786 | 16,786 | 15,019 | 15,019 | ||||||||||||
Life insurance policy liabilities | 24,694 | 24,694 | 24,638 | 24,638 | ||||||||||||
Debt issues | 58,621 | 57,655 | 44,042 | 43,651 | ||||||||||||
Bills payable and other liabilities | 18,086 | 18,083 | 19,140 | 19,148 | ||||||||||||
Loan capital | 6,291 | 6,113 | 6,631 | 6,740 | ||||||||||||
Asset and liability hedges — unrealised gains/(losses) | — | (277 | ) | — | (740 | ) | ||||||||||
(Refer to Note 39) |
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2005 | 2004 | 2003 | ||||||||||||||
Consolidated Statements of Profit and Loss | Footnote | $M | $M | $M | ||||||||||||
Net profit reported under Australian GAAP | (c | ) | 3,991 | 2,572 | 2,012 | |||||||||||
Pension expense adjustment * | (i | ) | (62 | ) | (24 | ) | (6 | ) | ||||||||
Life insurance market valuation of controlled entities | (k | ) | (778 | ) | (201 | ) | 245 | |||||||||
Reversal of goodwill amortisation | (l | ) | 325 | 324 | 322 | |||||||||||
Amortisation of identifiable intangible assets * | (bb | ) | (17 | ) | (17 | ) | (13 | ) | ||||||||
Movement in value of business acquired * | (m | ) | (102 | ) | (161 | ) | (202 | ) | ||||||||
Movement in policyholder liabilities | (r | ) | (17 | ) | 174 | 42 | ||||||||||
Movement in deferred tax relating to policyholder liabilities | (a | ) | (28 | ) | (36 | ) | (12 | ) | ||||||||
Reversal of unrealised gains and depreciation on life insurance property investments * | (o | ) | (30 | ) | 35 | (20 | ) | |||||||||
Movement in deferred acquisition costs * | (s | ) | (36 | ) | (31 | ) | (29 | ) | ||||||||
Marked to market of derivative instruments (under SFAS 133) * | (w | ) | 263 | (736 | ) | 636 | ||||||||||
Reversal/(utilisation) of redundancy provision* | (d | ) | (50 | ) | 102 | — | ||||||||||
Deconsolidation of variable interest entities | (z | ) | (76 | ) | (55 | ) | — | |||||||||
Reversal of realised/unrealised gain on treasury shares held by Life Insurance Statutory funds | (t | ) | (39 | ) | (45 | )** | 17 | ** | ||||||||
Movement in Loan Impairment Provision * | (u | ) | 230 | — | — | |||||||||||
Reversal of software write-off and software amortisation* | (aa | ) | (10 | ) | 97 | — | ||||||||||
Net income according to US GAAP | 3,564 | 2,043 | 3,000 | |||||||||||||
Other Comprehensive Income | ||||||||||||||||
Foreign currency translation reserve * | (q), (z | ) | (45 | ) | 19 | ** | (92 | ) | ||||||||
Pension plan * | (q | ) | 3 | (44 | ) | 68 | ||||||||||
Unrealised holding gains on available for sale securities * | (f | ) | 25 | (57 | ) | 59 | ||||||||||
Reclassification adjustment for gains included in net income | (f | ) | — | — | (1 | ) | ||||||||||
Marked to market of derivative instruments (under SFAS 133) * | (w | ) | (1 | ) | — | — | ||||||||||
(q | ) | 24 | (57 | ) | 58 | |||||||||||
Total other comprehensive income (loss) | (18 | ) | (82 | ) | 34 | |||||||||||
Total comprehensive income according to US GAAP | 3,546 | 1,961 | 3,034 | |||||||||||||
Basic earnings per share on net income according to US GAAP (cents) | 269 | 158 | 236 | |||||||||||||
Fully diluted earnings per share on net income according to US GAAP (cents) | 269 | 158 | 236 | |||||||||||||
Shareholders’ Equity | ||||||||||||||||
Shareholders’ equity reported under Australian GAAP, excluding outside equity interests | 24,271 | 22,405 | 20,024 | |||||||||||||
Tax effect of foreign currency translation reserve | (a | ) | 104 | 62 | 60 | |||||||||||
Unrealised net gain on available for sale securities * | (f | ) | 77 | 52 | 109 | |||||||||||
Prepaid pension cost | (i | ) | 844 | 930 | 970 | |||||||||||
Tax effect of prepaid pension cost | (i | ) | (246 | ) | (270 | ) | (282 | ) | ||||||||
Life insurance market valuation of controlled entities | (k | ) | (3,282 | ) | (2,504 | ) | (2,303 | ) | ||||||||
Amortisation of identifiable intangible assets | (l | ) | (72 | ) | (55 | ) | (38 | ) | ||||||||
Goodwill amortisation to 30 June 2002 | (l | ) | (78 | ) | (78 | ) | (78 | ) | ||||||||
Reversal of goodwill amortisation | (l | ) | 971 | 646 | 322 | |||||||||||
Movement in value of business acquired * | (m | ) | (747 | ) | (645 | ) | (484 | ) | ||||||||
Movement in deferred acquisition costs * | (s | ) | (298 | ) | (262 | ) | (231 | ) | ||||||||
Equity issued for Colonial acquisition | (bb) | (1,026 | ) | (1,026 | ) | (1,026 | ) | |||||||||
Reversal of unrealised gain and accumulated depreciation on life insurance property investments * | (o | ) | (91 | ) | (61 | ) | (96 | ) | ||||||||
Movement in policyholder liabilities | (r | ) | 353 | 370 | 196 | |||||||||||
Movement in deferred tax relating to policyholder liabilities | (r | ) | (104 | ) | (76 | ) | (40 | ) | ||||||||
Marked to market of derivative instruments (under SFAS 133) * | (w | ) | (286 | ) | (549 | ) | 187 | |||||||||
Movement in Loan Impairment Provisioning * | (u | ) | 230 | — | — | |||||||||||
Reversal of redundancy provision | (d | ) | 52 | 102 | — | |||||||||||
Deconsolidation of variable interest entities | (z | ) | (1,460 | ) | (1,537 | )** | — | |||||||||
Reversal of software write-off and software amortisation | (aa) | 87 | 97 | — | ||||||||||||
Reversal of asset revaluation reserve | (n | ) | (92 | ) | (61 | ) | — | |||||||||
Reclassification of Treasury shares | (t | ) | (316 | ) | (291 | )** | (264 | )** | ||||||||
Shareholders’ equity according to US GAAP | 18,891 | 17,249 | 17,026 | |||||||||||||
Outside Equity Interests (OEI) | ||||||||||||||||
OEI disclosed within shareholders’ equity under AGAAP | 1,158 | 2,176 | 1,824 | |||||||||||||
OEI disclosed within liabilities under US GAAP | 1,158 | 2,176 | 1,824 | |||||||||||||
* | Reconciliation items which are net of tax. The effective tax rate is 30%. | |
** | These adjustments include prior period restatements. Refer to relevant paragraph for further information. |
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2005 | 2004 | 2003 | ||||||||||||||
Consolidated Balance Sheets | Footnote | $M | $M | $M | ||||||||||||
Total assets reported under Australian GAAP | 329,035 | 305,995 | 265,110 | |||||||||||||
Deferred tax assets related to differences in life insurance policyholder liabilities | (a | ) | 56 | 84 | 115 | |||||||||||
Unrealised net gain(loss) on available for sale securities | (f | ) | 110 | 74 | 155 | |||||||||||
Prepaid pension cost | (i | ) | 1,088 | 1,173 | 1,213 | |||||||||||
Excess of net market value over net assets of life insurance controlled entities | (k | ) | (6,519 | ) | (5,741 | ) | (5,540 | ) | ||||||||
Goodwill, net of amortisation | (l | ) | 1,457 | 1,132 | 808 | |||||||||||
Value of business acquired, net of amortisation | (m | ) | 1,645 | 1,764 | 2,005 | |||||||||||
Life insurance policy deferred acquisition costs, net of amortisation | (s | ) | 863 | 803 | 750 | |||||||||||
Other identifiable intangible assets recognised, net of amortisation | (l | ) | 88 | 105 | 122 | |||||||||||
Unrealised gain and accumulated depreciation on life insurance property investments | (o | ) | (91 | ) | (61 | ) | (96 | ) | ||||||||
Marked to market of derivative instruments (under SFAS 133) | (w | ) | (926 | ) | (2,501 | ) | (481 | ) | ||||||||
Reclassification between reinsurance receivable and policyholder liabilities | 17 | 1 | (19 | ) | ||||||||||||
Consolidation of variable interest entity | (z | ) | 566 | 531 | 245 | |||||||||||
Adjustment to loan impairment provision | (u | ) | 354 | — | — | |||||||||||
Adjustment to treasury shares | (t | ) | (338 | ) | (300 | )* | (272 | )* | ||||||||
Reversal of asset revaluation reserve | (n | ) | (92 | ) | (61 | ) | — | |||||||||
Reversal of software write-off and software amortisation | (aa) | 124 | 139 | — | ||||||||||||
Total assets according to US GAAP | 327,438 | 303,137 | 264,387 | |||||||||||||
* | These adjustments include prior period restatements. Refer to relevant paragraph for further information. |
§ | Under Australian GAAP the criterion for recognition of timing differences is assurance beyond any reasonable doubt and for tax losses ‘virtual certainty’. The recognition criterion under US GAAP is that the tax benefit is probable. |
§ | Australian GAAP requires that an announcement of the Government’s intention to change the rate of company income tax in advance of periods in which the change will occur is adequate evidence for the deferred tax balances to be restated. This treatment is not permitted under SFAS 109: Accounting for Income Taxes which requires that the deferred tax liabilities and assets be adjusted in the Financial Year in which a change in the tax rate is enacted. |
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Weighted | Weighted | Weighted | ||||||||||||||||||||||
Movement in | Average | Average | Average | |||||||||||||||||||||
Executive Options | Exercise | Exercise | Exercise | |||||||||||||||||||||
during the year | 2005 | Price | 2004 | Price | 2003 | Price* | ||||||||||||||||||
Options Outstanding at the start of the year | 5,782,300 | $ | 27.15 | 7,708,600 | $ | 26.25 | 9,749,800 | $ | 25.91 | |||||||||||||||
Options Granted during the year | — | — | — | — | — | — | ||||||||||||||||||
Options Forfeited during the year | 29,700 | $ | 30.12 | 213,700 | $ | 25.50 | 1,381,200 | $ | 27.07 | |||||||||||||||
Options Exercised during the year | 2,616,200 | $ | 25.72 | 1,712,600 | $ | 23.30 | 660,000 | $ | 19.58 | |||||||||||||||
Options Outstanding at the end of the year | 3,136,400 | $ | 28.53 | 5,782,300 | $ | 27.15 | 7,708,600 | $ | 26.25 | |||||||||||||||
* | The exercise price for options granted since 1997 will be/have been adjusted by the premium formula (based on the actual difference between the dividend and bond yields at the date of vesting). |
Outstanding Options at 30 June 2005 | Number | Exercise Price | Expiry Date | |||||||||
September 1999 Options | 450,000 | $ | 23.84 | 24 Aug 2009 | ||||||||
September 2000 Options | 884,800 | $ | 26.97 | 13 Sept 2010 | ||||||||
October 2001 Options | 1,801,600 | $ | 30.12 | 3 Sept 2011 |
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(d) Provisions
211
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(h) | Consolidated Balance Sheet |
2005 | 2004 | 2003 | ||||||||||||||
Assets | Footnote | $M | $M | $M | ||||||||||||
Loans, advances and other receivables under Australian GAAP | 217,516 | 189,391 | 160,347 | |||||||||||||
Adjustments to impairment provisions | (u | ) | 354 | — | — | |||||||||||
Marked to market revaluation of derivative instruments (under SFAS133) | (w | ) | (8 | ) | 8 | (13 | ) | |||||||||
According to US GAAP | 217,862 | 189,399 | 160,334 | |||||||||||||
Available for sale securities under Australian GAAP | — | — | — | |||||||||||||
Reclassification from investment securities | (f | ) | 10,272 | 11,447 | 11,036 | |||||||||||
Restatement of available for sale securities to fair value | (f | ) | 110 | 74 | 155 | |||||||||||
Consolidation of variable interest entity | (z | ) | 566 | 531 | 245 | |||||||||||
According to US GAAP | 10,948 | 12,052 | 11,436 | |||||||||||||
Receivables due from other financial institutions under Australian GAAP | 6,205 | 8,369 | 7,066 | |||||||||||||
Deconsolidation of variable interest entities | (y | ) | (400 | ) | — | — | ||||||||||
According to US GAAP | 5,805 | 8,369 | 7,066 | |||||||||||||
Investment securities under Australian GAAP | 10,272 | 11,447 | 11,036 | |||||||||||||
Reclassification to available for sale securities | (f | ) | (10,272 | ) | (11,447 | ) | (11,036 | ) | ||||||||
According to US GAAP | — | — | — | |||||||||||||
Trading securities under Australian GAAP | 14,628 | 14,896 | 10,435 | |||||||||||||
Reclassification from life insurance investment assets | 26,690 | 10,697 | ** | 9,912 | ** | |||||||||||
According to US GAAP | 41,318 | 25,593 | 20,619 | |||||||||||||
Insurance investment assets under Australian GAAP | 27,837 | 28,942 | 27,835 | |||||||||||||
Reclassification to trading securities | (26,690 | ) | (10,697 | )** | (9,912 | )** | ||||||||||
Reclassification to real estate investment assets | (o | ) | (403 | ) | (292 | ) | (383 | ) | ||||||||
Unrealised gains and depreciation adjustment | (o | ) | (93 | ) | (83 | ) | (96 | ) | ||||||||
Reclassification of Treasury shares | (t | ) | (338 | ) | (300 | )* | (272 | )* | ||||||||
Reclassification of separate account business to other assets | (r | ) | — | (17,570 | ) | (17,172 | ) | |||||||||
Reclassification of Mortgage Loans to other assets | (r | ) | (313 | ) | — | — | ||||||||||
According to US GAAP | — | — | — | |||||||||||||
Real estate investments under Australian GAAP | — | — | — | |||||||||||||
Reclassification from life insurance investment assets | (o | ) | 373 | 292 | 383 | |||||||||||
According to US GAAP | 373 | 292 | 383 | |||||||||||||
Property, plant and equipment under Australian GAAP | 1,344 | 1,204 | 821 | |||||||||||||
Reversal of asset revaluation reserve | (n | ) | (92 | ) | (61 | ) | — | |||||||||
According to US GAAP | 1,252 | 1,143 | 821 | |||||||||||||
Intangible Assets under Australia GAAP | 4,394 | 4,705 | 5,029 | |||||||||||||
Identifiable intangible asset amortisation | (l | ) | (79 | ) | (62 | ) | (45 | ) | ||||||||
Goodwill amortisation to 30 June 2002 | (l | ) | (78 | ) | (78 | ) | (78 | ) | ||||||||
Reversal of goodwill amortisation | (l | ) | 971 | 646 | 322 | |||||||||||
Adjustment to equity issued on Colonial acquisition | (bb) | (1,026 | ) | (1,026 | ) | (1,026 | ) | |||||||||
Adjustment to policyholder liability differences | (bb) | 593 | 593 | 593 | ||||||||||||
Reclassification to Value of Business Acquired | (l | ) | (2,786 | ) | (2,786 | ) | (2,786 | ) | ||||||||
Deferred tax liability on value of business acquired | (l | ) | 1,256 | 1,256 | 1,256 | |||||||||||
Pension fund surplus acquired | (i | ) | (243 | ) | (243 | ) | (243 | ) | ||||||||
Deferred tax assets on differences in life insurance policyholder liabilities | (a | ) | (158 | ) | (158 | ) | (158 | ) | ||||||||
Deferred tax liability on pension fund surplus acquired | (i | ) | 82 | 82 | 82 | |||||||||||
Reclassification of excess of net market value of net tangible assets of life insurance controlled entities at acquisition from other assets to goodwill | (l | ) | 2,905 | 2,905 | 2,905 | |||||||||||
According to US GAAP | 5,831 | 5,834 | 5,851 | |||||||||||||
Value of Business Acquired, under Australian GAAP | — | — | — | |||||||||||||
Reclassification from Goodwill | (l | ) | 2,786 | 2,786 | 2,786 | |||||||||||
Value of Business Acquired amortisation (net of imputed interest) | (m | ) | (1,146 | ) | (1,022 | ) | (781 | ) | ||||||||
According to US GAAP | 1,640 | 1,764 | 2,005 | |||||||||||||
* | These adjustments include prior period restatements. Refer to relevant paragraph for further information. | |
** | Restatement resulting from Treasury Shares (refer to paragraph (t)) |
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2005 | 2004 | 2003 | ||||||||||||||
Assets (continued) | Footnote | $M | $M | $M | ||||||||||||
Other assets under Australian GAAP | 24,241 | 25,292 | 23,459 | |||||||||||||
Deferred tax assets on differences in life insurance policyholder liabilities | (a | ) | 56 | 84 | 115 | |||||||||||
Life insurance market valuation of controlled entities | (k | ) | (3,614 | ) | (2,836 | ) | (2,635 | ) | ||||||||
Reclassification of excess of net market value of net tangible assets of life insurance controlled entities at acquisition from other assets to goodwill | (l | ) | (2,905 | ) | (2,905 | ) | (2,905 | ) | ||||||||
Prepaid pension cost | (i | ) | 1,088 | 1,173 | 1,213 | |||||||||||
Reclassification from life insurance investment assets to separate account business | (r | ) | — | 17,570 | 17,172 | |||||||||||
Reclassification of Mortgage Loans from insurance investment assets | (r | ) | 313 | — | — | |||||||||||
Life insurance policy deferred acquisition costs, net of amortisation | (s | ) | 863 | 803 | 750 | |||||||||||
Reclassification between reinsurance receivable and policyholder liabilities | 17 | 1 | 19 | |||||||||||||
Marked to market revaluation of derivative instruments (under SFAS 133) | (w | ) | (918 | ) | (2,509 | ) | (468 | ) | ||||||||
Deconsolidation of variable interest entities | (z | ) | 400 | — | — | |||||||||||
Reversal of software write-off and software amortisation | (aa) | 124 | 139 | — | ||||||||||||
Other | 30 | 21 | — | |||||||||||||
According to US GAAP | 19,695 | 36,833 | 36,720 | |||||||||||||
Liabilities | ||||||||||||||||
Deposits and other public borrowings under Australian GAAP | 168,029 | 163,177 | 140,974 | |||||||||||||
Marked to market revaluation of derivative instruments (SFAS 133) | (w | ) | 4 | 9 | 10 | |||||||||||
According to US GAAP | 168,033 | 163,186 | 140,984 | |||||||||||||
Income tax liability under Australian GAAP | 1,550 | 811 | 876 | |||||||||||||
Tax effect of foreign currency translation reserve | (a | ) | (104 | ) | (62 | ) | (60 | ) | ||||||||
Deferred tax liability on unrealised gain on available for sale securities | (f | ) | 33 | 22 | 47 | |||||||||||
Reclassification from life insurance policyholder liabilities | (r | ) | 225 | 195 | 197 | |||||||||||
Deferred tax liability on pension income | (i | ) | 326 | 352 | 364 | |||||||||||
Reclassification of Treasury shares | (t | ) | 21 | 9 | * | 8 | * | |||||||||
Adjustment to loan impairment provision | (u | ) | 99 | — | — | |||||||||||
Deferred tax liability on value of business acquired | (m | ) | 863 | 885 | 959 | |||||||||||
Tax effect of other amortisation | — | 27 | 30 | |||||||||||||
Deferred tax assets on marked to market revaluation of derivative instruments (SFAS 133) | (w | ) | 13 | (235 | ) | 81 | ||||||||||
Reversal of software write-off and software amortisation | (aa) | 38 | 42 | — | ||||||||||||
Reversal of redundancy provision | (d | ) | 22 | 44 | — | |||||||||||
Tax effect of deconsolidation of variable interest entity | (z | ) | 23 | 11 | — | |||||||||||
According to US GAAP | 3,109 | 2,101 | 2,494 | |||||||||||||
Other Provisions under Australian GAAP | 881 | 997 | 819 | |||||||||||||
Reversal of redundancy provision | (d | ) | (74 | ) | (146 | ) | — | |||||||||
Other | (u | ) | 25 | — | — | |||||||||||
According to US GAAP | 832 | 851 | 819 | |||||||||||||
Bills payable and other liabilities under Australian GAAP | 18,086 | 19,140 | 19,027 | |||||||||||||
Reclassification from life insurance policyholder liabilities to separate account business | (r | ) | — | 16,762 | 16,497 | |||||||||||
Marked to market revaluation of derivative instruments (FAS 133) | (w | ) | (567 | ) | (1,760 | ) | (954 | ) | ||||||||
According to US GAAP | 17,519 | 34,142 | 34,570 | |||||||||||||
Insurance policyholder liabilities under Australian GAAP | 24,694 | 24,638 | 23,861 | |||||||||||||
Adjustment to policyholder liability differences in acquisition | (r | ) | 593 | 593 | 593 | |||||||||||
Reclassification to income tax liability | (r | ) | (225 | ) | (195 | ) | (197 | ) | ||||||||
Reclassification to Other Assets of life insurance policy deferred acquisition costs | (s | ) | 935 | 871 | 785 | |||||||||||
Reclassification of separate account business to other liabilities | (r | ) | — | (16,762 | ) | (16,497 | ) | |||||||||
Reclassification between reinsurance receivable and policyholder liabilities | 17 | 1 | 19 | |||||||||||||
Movement in policyholder liabilities | (161 | ) | (235 | ) | (62 | ) | ||||||||||
According to US GAAP | 25,853 | 8,911 | 8,502 | |||||||||||||
Debt issues under Australian GAAP | 58,621 | 44,042 | 30,629 | |||||||||||||
Marked to market revaluation of derivative instruments (SFAS 133) | (w | ) | (65 | ) | 9 | 77 | ||||||||||
Consolidation of variable interest entity | (z | ) | 566 | 531 | 245 | |||||||||||
According to US GAAP | 59,122 | 44,582 | 30,951 | |||||||||||||
Loan Capital under Australian GAAP | 6,291 | 6,631 | 6,025 | |||||||||||||
Marked to market revaluation of derivative instruments (SFAS 133) | (w | ) | — | 25 | 118 | |||||||||||
Deconsolidation of variable interest entity | (z | ) | 1,460 | * | 1,537 | * | — | |||||||||
According to US GAAP | 7,751 | 8,193 | 6,143 | |||||||||||||
* | These adjustments include prior period restatements. Refer to relevant paragraph for further information. |
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Benchmark Asset | Actual | |||||||
Asset Sector | Allocation | Allocation | ||||||
Australian Equities | 27.5 | % | 30.7 | % | ||||
Overseas Equities | 21.0 | % | 21.5 | % | ||||
Real Estate | 15.0 | % | 15.4 | % | ||||
Fixed Interest Securities | 25.5 | % | 24.1 | % | ||||
Cash | 5.0 | % | 4.9 | % | ||||
Other(1) | 6.0 | % | 3.4 | % |
(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. |
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2005 | 2004 | 2003 | ||||||||||
A$M | A$M | A$M | ||||||||||
Service cost | (53 | ) | (56 | ) | (52 | ) | ||||||
Interest cost | (217 | ) | (226 | ) | (222 | ) | ||||||
Expected return on assets | 316 | 307 | 308 | |||||||||
Amortisation of transitional obligation assets | — | 52 | 52 | |||||||||
Recognised net gain (loss) | (17 | ) | (6 | ) | — | |||||||
Employer financed benefits within Accumulation Division | (121 | ) | (111 | ) | (97 | ) | ||||||
Net periodic pension (cost) income | (92 | ) | (40 | ) | (11 | ) | ||||||
Expensed employer contribution | (4 | ) | (5 | ) | (3 | ) | ||||||
(88 | ) | (35 | ) | (8 | ) | |||||||
Less tax effect | 26 | 11 | 2 | |||||||||
Pension Expense Adjustment — see US GAAP Reconciliation | (62 | ) | (24 | ) | (6 | ) | ||||||
Change in benefit obligation: | ||||||||||||
Benefit obligation at beginning of year | 3,902 | 3,656 | 3,298 | |||||||||
Service Cost | 49 | 56 | 52 | |||||||||
Member Contributions | 14 | 17 | 19 | |||||||||
Interest Cost | 217 | 226 | 222 | |||||||||
Merger of CUKSPS and SI&CRBS with the CBA(UK)SBS | — | — | 126 | |||||||||
Actuarial (Gains) Loss | 177 | 265 | 345 | |||||||||
Benefits Paid | (320 | ) | (340 | ) | (386 | ) | ||||||
Foreign Currency Exchange Rate Movements | (38 | ) | 22 | (20 | ) | |||||||
Benefit obligation at end of year | 4,001 | 3,902 | 3,656 | |||||||||
Change in fair value of assets | ||||||||||||
Fair value of assets at beginning of year | (4,460 | ) | (4,328 | ) | (4,730 | ) | ||||||
Actual return on assets | (638 | ) | (544 | ) | 22 | |||||||
Merger of CUKSPS and SI&CRBS with the CBA(UK)SBS | — | — | (101 | ) | ||||||||
Total contributions | (18 | ) | (22 | ) | (22 | ) | ||||||
Benefits and Expenses Paid | 324 | 340 | 386 | |||||||||
Employer financed benefits within Accumulation Division | 121 | 111 | 97 | |||||||||
Foreign Currency Exchange Rate Movements | 30 | (17 | ) | 20 | ||||||||
Fair value of assets at end of year | (4,641 | ) | (4,460 | ) | (4,328 | ) | ||||||
Funded status at measurement date: | (640 | ) | (558 | ) | (672 | ) | ||||||
Assets not recognised: | ||||||||||||
transitional obligation assets | — | — | 52 | |||||||||
unrecognised net gains (loss) | (448 | ) | (615 | ) | (593 | ) | ||||||
Net Amount Recognised | (1,088 | ) | (1,173 | ) | (1,213 | ) | ||||||
Comprising of: | ||||||||||||
Prepaid Pension Cost | (1,088 | ) | (1,173 | ) | (1,213 | ) | ||||||
Additional minimum liability | 59 | 56 | 81 | |||||||||
Accumulated Other Comprehensive (Income) Loss | (59 | ) | (56 | ) | (81 | ) | ||||||
Net Amount Recognised | (1,088 | ) | (1,173 | ) | (1,213 | ) | ||||||
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2005 | 2004 | 2003 | ||||||||||
A$M | A$M | A$M | ||||||||||
Projected benefit obligation | 408 | 397 | 387 | |||||||||
Accumulated benefit obligation | 404 | 392 | 383 | |||||||||
Fair value of plan assets | 326 | 320 | 296 |
Assumption | 2005 | 2004 | 2003 | |||||||||
Discount Rate (Gross of tax) | 5.10 | % | 6.00 | % | 6.00 | % | ||||||
Compensation increase rate | 4.25 | % | 4.25 | % | 4.25 | % | ||||||
Return on assets | 7.50 | % | 7.50 | % | 6.75 | % |
Financial Year Ending | A$M | |||
30 June 2006 | 234 | |||
30 June 2007 | 233 | |||
30 June 2008 | 234 | |||
30 June 2009 | 234 | |||
30 June 2010 | 240 | |||
1 July 2010 to 30 June 2015 | 1,195 |
(j) | Employee Benefits — Post Retirement Benefits Other Than Pensions |
(k) | Life Insurance Market Valuation of Controlled Entities |
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(l) | Intangible Assets |
2005 | 2004 | |||||||
Segment | $M | $M | ||||||
Banking | 4,361 | 4,361 | ||||||
Funds management | 1,288 | 1,258 | ||||||
Insurance | 218 | 218 | ||||||
5,867 | 5,837 | |||||||
(m) | Value of Business Acquired (‘VOBA’) |
2005 | 2004 | |||||||
$M | $M | |||||||
Opening Balance, 1 July | 879 | 1,040 | ||||||
Imputed interest | 213 | 215 | ||||||
Amortisation | (337 | ) | (450 | ) | ||||
Movement in deferred tax liability on value of business acquired | 22 | 74 | ||||||
Closing Net Balance, 30 June | 777 | 879 | ||||||
(n) | Property and Other Non-Current Asset Revaluations |
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(o) | Properties Held by Insurance Companies |
(p) | Impairment of Assets |
(q) | Comprehensive Income |
2005 | 2004 | 2003 | ||||||||||
$M | $M | $M | ||||||||||
Foreign currency translation reserve | ||||||||||||
Balance at beginning of Financial Year | (118 | ) | (137 | ) | (45 | ) | ||||||
Foreign currency translation adjustment net of tax expense | (45 | ) | 19 | * | (92 | ) | ||||||
Balance at end of Financial Year | (163 | ) | (118) | * | (137 | ) | ||||||
�� | ||||||||||||
Available for Sale securities | ||||||||||||
Balance at beginning of Financial Year | 52 | 109 | 51 | |||||||||
Change in fair value of available for sale securities | 25 | (57 | ) | 58 | ||||||||
Balance at end of Financial Year | 77 | 52 | 109 | |||||||||
FAS 133 | ||||||||||||
Balance at beginning of Financial Year | — | — | — | |||||||||
Change in value of cash flow hedges | (1 | ) | — | — | ||||||||
Balance at end of Financial Year | (1 | ) | — | — | ||||||||
Pension Plans | ||||||||||||
Balance at beginning of Financial Year | 56 | 100 | 32 | |||||||||
Adjustment to net assets in UK Pension Plan — net of tax expense | 3 | (44 | ) | 68 | ||||||||
Balance at end of Financial Year | 59 | 56 | 100 | |||||||||
Total Other Comprehensive Income | (28 | ) | (10 | ) | 72 | |||||||
* | These adjustments include prior period restatements. Refer to paragraph (z) for further information. |
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(r) | Life Insurance |
(i) | the profit margin is set to zero; and | |
(ii) | all future losses are recognised immediately. |
(i) | SFAS 60: Accounting and Reporting by Insurance Enterprises applies to products such as traditional whole of life, certain endowment contracts, life contingent annuity contracts, term insurance, disability income protection and group life. |
(ii) | SFAS 97: Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realised Gains and Losses from the Sale of Investments covers investment contracts and universal life policies, such as unit-linked and investment account policies. | |
Under SFAS 97, the liability is set equal to: | ||
(a) | the account balance that accrues to the benefit of the policyholder at the date of the financial statements; and | |
(b) | any unearned revenue liability; |
(s) | Deferred Acquisition Costs (‘DAC’) — Expenses of Acquiring Life Insurance, Investment and Related Contracts |
(i) | deferrable; and | |
(ii) | systematically amortised as part of the calculation of the policy liability |
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2005 | 2004 | |||||||
$M | $M | |||||||
Difference in deferral of new business acquisition expenses | (86 | ) | (72 | ) | ||||
Difference in amortisation of acquisition expenses | 35 | 32 | ||||||
Tax effect of differences in acquisition expense treatment | 15 | 9 | ||||||
(36 | ) | (31 | ) | |||||
2005 | 2004 | |||||||
$M | $M | |||||||
Opening Balance, 1 July | 803 | 750 | ||||||
Acquisition costs for the year | 135 | 134 | ||||||
Amortisation of DAC/Imputed interest | (76 | ) | (81 | ) | ||||
Net movement | 59 | 53 | ||||||
Closing Balance, 30 June | 862 | 803 | ||||||
2005 | 2004 | 2003 | ||||||||||
$M | $M | $M | ||||||||||
Servicing fee | 20 | 15 | 17 | |||||||||
Management fee | 2 | 2 | 2 | |||||||||
Excess servicing fee | 30 | 36 | 30 | |||||||||
Proceeds from sale of mortgage loans | 5,989 | 3,436 | 1,664 | |||||||||
Interest rate swaps | 14 | 27 | 35 | |||||||||
Total cash receipts | 6,055 | 3,516 | 1,748 | |||||||||
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Guarantees | Standby Letters | |||||||
of Credit | ||||||||
$M | $M | |||||||
Less than 1 year | 2,431 | 234 | ||||||
1-3 years | — | 17 | ||||||
3-5 years | — | 10 | ||||||
Over 5 years | 7 | 59 | ||||||
Total | 2,438 | 321 | ||||||
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- | Asset backed finance programs — The Group utilises VIEs such as special purpose entities under master series agreements to assist customers’ financing needs through providing customer access to the capital markets. Certain of these programs are deemed to be controlled by the Group and are consolidated within the Group. Details of these arrangements are outlined on this page. | |
- | Securitisation of assets — The Group conducts a Loan Securitisation program through which it packages loans and issues securities to investors through a special purpose entity. The entity meets the requirements for classification as a QSPE under US GAAP, which is not considered a VIE and is not consolidated within the Group. Details of these arrangements are outlined on page 220. | |
- | Financing and investment activities — The Group utilises VIEs and may transact with VIEs as part of its financing and investment activities. All transactions involving VIEs are conducted on an arms length basis and may involve financing the VIE, transacting derivatives, or acquiring third party assets. Certain VIEs are deemed to be controlled by the Group and have been consolidated into the Group. These VIEs involve structured investment transactions and are primarily single purpose entities where the Group carries the underlying exposure to the risks in the VIE. As the Group carries the exposure to these VIEs on balance sheet, the consolidation of these VIEs into the Group does not impact the Statement of Financial Performance or Statement of Financial Position of the Group. | |
- | During the Financial Year 2004, the Group issued Trust Preferred Securities via special purpose entities. These entities are deemed to be VIEs and not controlled by the Group. These VIEs have been deconsolidated and have resulted in $832m of equity being reclassified to debt issues. Dividends paid on the trust preferred securities have been reclassified as interest expense. The Bank’s Trust Preferred Securities (“TPS”), issued on 6 August 2003, are denominated in U.S. dollars. On reclassification of the TPS from equity to debt, the foreign currency translation reserve must also be adjusted to reflect the foreign currency translation differences arising each period between the Australian dollar and the U.S. dollar. These foreign currency translation movements in respect of the TPS did not form part of the previous year’s adjustments. The current period reconciliation includes adjustment for the foreign currency translation movements. The prior period has also been restated to correct this error (2004: $25 million decrease in liabilities, increase in shareholders equity and increase in other comprehensive income). | |
- | During the Financial Year 2004, the Group also issued Perpetual Exchangeable Resettable Listed Securities (“PERLS II”) via a special purpose entity. This entity is deemed to be a VIE and not controlled by the Group and has been deconsolidated. The effects are described in further detail below. |
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2001 | ||||
$M | ||||
Cost of acquisition under Australian GAAP (Note 1A) | 9,120 | |||
Less 351,409,450 new Commonwealth Bank shares @ $26.39(1) | (9,274 | ) | ||
Add 351,409,450 shares @ $23.47(2) | 8,248 | |||
Revised cost of acquisition under US GAAP | 8,094 | |||
Fair Value of net tangible assets acquired: | ||||
Net tangible assets under Australian GAAP | 910 | |||
Pension fund surplus | 243 | |||
Differences in life insurance policyholder liabilities | (559 | ) | ||
Differences in deferred taxes | 76 | |||
Net tangible assets under US GAAP | 670 | |||
Intangible Assets on acquisition under US GAAP | 7,424 | |||
Intangible assets acquired on Colonial Acquisition: | ||||
Identifiable intangible assets(3) | 1,917 | |||
Goodwill (unidentifiable intangible assets)(4) | 5,507 | |||
7,424 | ||||
(1) | Price calculated under Australian GAAP based on the weighted average share price on the acquisition date, 13 June 2000. | |
(2) | Under US GAAP price calculated as weighted average closing price for the two days either side of the announcement date (10 March 2000). Non trading days were excluded from the calculation. Value of equity issued for Colonial acquisition under US GAAP accounting is reduced by $1,026 million. | |
(3) | Includes Colonial State Bank Core Deposits ($149 million) which is to be amortised on a straightline basis over 8 years and Value of Business Acquired (VOBA) net of associated deferred tax liability $1,530 million (refer Note 48 (m) for amortisation details). The carrying value of the core deposits at 30 June 2005 is $55 million, net of amortisation. | |
(4) | Goodwill on acquisition under US GAAP includes the excess of net market value over net assets of life insurance controlled entities. |
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/s/ Ernst & Young | /s/ S J Ferguson | |
Ernst & Young | S J Ferguson | |
Sydney | Partner | |
Date: 14 December 2005 |
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Rank | Name of Holder | Number of Shares | % | |||||||||
1 | J P MORGAN NOMINEES AUSTRALIA LIMITED | 120,833,243 | 9.38 | |||||||||
2 | NATIONAL NOMINEES LIMITED | 104,488,712 | 8.11 | |||||||||
3 | WESTPAC CUSTODIAN NOMINEES LTD | 87,684,237 | 6.80 | |||||||||
4 | CITICORP NOMINEES PTY LIMITED | 66,452,383 | 5.16 | |||||||||
5 | RBC GLOBAL SERVICES AUSTRALIA NOMINEES PTY LTD | 30,134,354 | 2.34 | |||||||||
6 | ANZ NOMINEES LIMITED | 28,577,491 | 2.22 | |||||||||
7 | COGENT NOMINEES PTY LIMITED | 22,122,631 | 1.72 | |||||||||
8 | QUEENSLAND INVESTMENT CORPORATION | 13,763,197 | 1.07 | |||||||||
9 | AMP LIFE LIMITED | 12,329,367 | 0.96 | |||||||||
10 | AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED | 8,095,245 | 0.63 | |||||||||
11 | HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED | 7,421,982 | 0.58 | |||||||||
12 | INVIA CUSTODIAN PTY LIMITED | 6,312,546 | 0.49 | |||||||||
13 | BOND STREET CUSTODIANS LIMITED | 6,127,591 | 0.48 | |||||||||
14 | WESTPAC FINANCIAL SERVICES LTD | 5,090,940 | 0.40 | |||||||||
15 | SUNCORP CUSTODIAN SERVICES PTY LTD | 4,116,339 | 0.32 | |||||||||
16 | GOVERNMENT SUPERANNUATION OFFICE | 4,110,726 | 0.32 | |||||||||
17 | UBS PRIVATE CLIENTS AUSTRALIA NOMINEES PTY LTD | 3,934,675 | 0.31 | |||||||||
18 | VICTORIAN WORKCOVER AUTHORITY | 3,273,502 | 0.25 | |||||||||
19 | CSS BOARD & PSS BOARD | 3,189,682 | 0.25 | |||||||||
20 | IAG NOMINEES PTY LIMITED | 2,869,438 | 0.22 |
Number of | Percentage | Number of | Percentage | |||||||||||||
Range | Shareholders | Shareholders | Shares | Issued Capital | ||||||||||||
1-1,000 | 529,277 | 75.27 | 182,732,870 | 14.18 | ||||||||||||
1,001-5,000 | 153,981 | 21.90 | 312,142,250 | 24.22 | ||||||||||||
5,001-10,000 | 13,852 | 1.97 | 95,053,959 | 7.38 | ||||||||||||
10,001-100,000 | 5,764 | 0.82 | 110,437,297 | 8.57 | ||||||||||||
100,001 and over | 252 | 0.04 | 588,221,353 | 45.65 | ||||||||||||
Total | 703,126 | 100.00 | 1,288,587,729 | 100.00 | ||||||||||||
Less than marketable parcel of $500 | 11,992 | 57,143 | ||||||||||||||
§ | 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. |
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Rank | Name of Holder | Number of Shares | % | |||||||||
1 | RBC GLOBAL SERVICES AUSTRALIA NOMINEES PTY LIMITED | 61,599 | 1.76 | |||||||||
2 | UBS NOMINEES PTY LTD | 59,893 | 1.71 | |||||||||
3 | UBS PRIVATE CLIENTS AUSTRALIA NOMINEES PTY LTD | 42,444 | 1.21 | |||||||||
4 | BOND STREET CUSTODIANS LIMITED | 41,860 | 1.20 | |||||||||
5 | INVIA CUSTODIAN PTY LIMITED | 35,437 | 1.01 | |||||||||
6 | ANZ EXECUTORS & TRUSTEE COMPANY LIMITED | 34,871 | 1.00 | |||||||||
7 | THE AUSTRALIAN NATIONAL UNIVERSITY | 33,532 | 0.96 | |||||||||
8 | NATIONAL NOMINEES LIMITED | 33,527 | 0.96 | |||||||||
9 | AUSTRALIAN EXECUTOR TRUSTEES LIMITED | 27,950 | 0.80 | |||||||||
10 | BOXALL MARINE PTY LTD | 25,000 | 0.71 | |||||||||
11 | QUESTOR FINANCIAL SERVICES LIMITED | 23,912 | 0.68 | |||||||||
12 | LIVINGSTONE INVESTMENTS (NSW) PTY LIMITED | 15,500 | 0.44 | |||||||||
13 | MS THELMA JOAN MARTIN-WEBER | 12,500 | 0.36 | |||||||||
14 | BT PORTFOLIO SERVICES LIMITED (WA) | 11,303 | 0.32 | |||||||||
15 | ALBERT INVESTMENTS PTY LIMITED | 10,000 | 0.29 | |||||||||
16 | FELDEN PTY LTD | 10,000 | 0.29 | |||||||||
17 | GOLDMAN SACHS JBWERE CAPITAL MARKETS LTD | 10,000 | 0.29 | |||||||||
18 | MARBEAR HOLDINGS PTY LIMITED | 10,000 | 0.29 | |||||||||
19 | MRS FAY CLEO MARTIN-WEBER | 10,000 | 0.29 | |||||||||
20 | SWINBURNE UNIVERSITY OF TECHNOLOGY | 10,000 | 0.29 | |||||||||
21 | PERPETUAL TRUSTEE CO LTD | 8,418 | 0.24 | |||||||||
22 | E G SUPERANNUATION PTY LTD | 7,500 | 0.21 | |||||||||
23 | MR STEPHEN JOHNSON | 7,500 | 0.21 | |||||||||
24 | MRS JENNIFER JANE ROBINSON | 7,500 | 0.21 | |||||||||
25 | MR JOHN RODNEY ROBINSON | 7,500 | 0.21 | |||||||||
26 | LISANI PTY LIMITED | 6,250 | 0.18 | |||||||||
27 | MARGEN BIGGS PTY LIMITED | 6,250 | 0.18 | |||||||||
28 | AVANTEOS INVESTMENTS LIMITED | 5,846 | 0.17 | |||||||||
29 | BRENCORP NO 11 PTY LIMITED | 5,513 | 0.16 |
Number of | Percentage | Number of | Percentage | |||||||||||||
Range | Shareholders | Shareholders | Shares | Issued Capital | ||||||||||||
1-1,000 | 20,821 | 98.41 | 2,398,258 | 68.52 | ||||||||||||
1,001-5,000 | 305 | 1.44 | 606,723 | 17.34 | ||||||||||||
5,001-10,000 | 19 | 0.09 | 143,052 | 4.09 | ||||||||||||
10,001-100,000 | 12 | 0.06 | 351,967 | 10.05 | ||||||||||||
100,001 and over | — | — | — | — | ||||||||||||
Total | 21,157 | 100 | 3,500,000 | 100.00 | ||||||||||||
Less than marketable parcel of $500 | 5 | 7 | ||||||||||||||
§ | 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, |
§ | 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 Commonwealth Bank PERLS. |
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Rank | Name of Holder | Number of Shares | % | |||||||||
1 | J P MORGAN NOMINEES AUSTRALIA LIMITED | 435,800 | 11.62 | |||||||||
2 | NATIONAL NOMINEES LIMITED | 228,973 | 6.11 | |||||||||
3 | RBC GLOBAL SERVICES AUSTRALIA NOMINEES PTY LIMITED | 134,231 | 3.58 | |||||||||
4 | UBS WARBURG PRIVATE CLIENTS NOMINEES PTY LTD | 91,814 | 2.45 | |||||||||
5 | BOND STREET CUSTODIANS LIMITED | 69,791 | 1.86 | |||||||||
6 | CITICORP NOMINEES PTY LIMITED | 65,015 | 1.73 | |||||||||
7 | WESTPAC CUSTODIAN NOMINEES LIMITED | 63,185 | 1.68 | |||||||||
8 | INVIA CUSTODIAN PTY LIMITED | 56,693 | 1.51 | |||||||||
9 | QUESTOR FINANCIAL SERVICES LIMITED | 52,759 | 1.41 | |||||||||
10 | UBS NOMINEES PTY LTD | 29,520 | 0.79 | |||||||||
11 | ANZ EXECUTORS AND TRUSTEE COMPANY LIMITED | 27,760 | 0.74 | |||||||||
12 | PERPETUAL TRUSTEE COMPANY LIMITED | 26,530 | 0.71 | |||||||||
13 | CRYTON INVESTMENTS NO 9 PTY LTD | 25,000 | 0.67 | |||||||||
14 | GORDON MERCHANT NO 2 PTY LTD | 24,440 | 0.65 | |||||||||
15 | J NEAVE INVESTMENTS PTY LIMITED | 24,012 | 0.64 | |||||||||
16 | CLYCUT PTY LTD | 21,892 | 0.58 | |||||||||
17 | ANZ NOMINEES LIMITED | 20,613 | 0.55 | |||||||||
18 | TYNONG PASTORAL CO PTY LTD | 19,950 | 0.53 | |||||||||
19 | COGENT NOMINEES PTY LIMITED | 19,192 | 0.51 | |||||||||
20 | ISRAELITE HOUSE OF DAVID | 15,000 | 0.40 | |||||||||
21 | LUTOVI INVESTMENTS PTY LIMITED | 15,000 | 0.40 |
Number of | Percentage | Number of | Percentage | |||||||||||||
Range | Shareholders | Shareholders | Shares | Issued Capital | ||||||||||||
1-1,000 | 8,877 | 96.14 | 1,456,990 | 38.85 | ||||||||||||
1,001-5,000 | 295 | 3.2 | 658,808 | 17.57 | ||||||||||||
5,001-10,000 | 33 | 0.36 | 255,830 | 6.82 | ||||||||||||
10,001-100,000 | 26 | 0.28 | 713,599 | 19.03 | ||||||||||||
100,001 and over | 2 | 0.02 | 664,773 | 17.73 | ||||||||||||
Total | 9,233 | 100.00 | 3,750,000 | 100.00 | ||||||||||||
Less than marketable parcel of $500 | 1 | 2 | ||||||||||||||
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Average Daily Trading Volume | ||||||||||||||||
Period | High Closing Price | Low Closing Price | (Number of Shares) | |||||||||||||
Ordinary Shares | ||||||||||||||||
1998 | 19.49 | 14.70 | 1,726,916 | |||||||||||||
1999 | 28.69 | 18.50 | 1,731,082 | |||||||||||||
2000 | 27.95 | 22.54 | 2,136,170 | |||||||||||||
2001 | 34.15 | 26.25 | 2,892,307 | |||||||||||||
2002 | 34.76 | 25.14 | 3,566,592 | |||||||||||||
2003 | 32.36 | 23.20 | 3,995,429 | |||||||||||||
2004 | ||||||||||||||||
First Quarter | 30.16 | 27.48 | 3,644,533 | |||||||||||||
Second Quarter | 29.45 | 27.14 | 2,723,437 | |||||||||||||
Third Quarter | 33.30 | 29.28 | 3,906,628 | |||||||||||||
Fourth Quarter | 33.51 | 30.80 | 3,096,567 | |||||||||||||
2005 | ||||||||||||||||
First Quarter | 32.85 | 28.87 | 3,779,385 | |||||||||||||
Second Quarter | 32.19 | 30.20 | 2,905,462 | |||||||||||||
Third Quarter | 37.09 | 32.06 | 3,866,186 | |||||||||||||
Forth Quarter | 38.38 | 35.09 | 2,955,691 | |||||||||||||
June | 38.38 | 37.55 | 3,303,509 | |||||||||||||
July | 39.18 | 37.63 | 2,888,872 | |||||||||||||
August | 39.48 | 36.75 | 4,992,767 | |||||||||||||
September | 38.75 | 37.35 | 3,304,869 | |||||||||||||
October | 38.88 | 37.00 | 3,128,997 | |||||||||||||
November | 42.00 | 39.25 | 3,095,721 |
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Board of Directors | ||||||||||
Name | Age | Position | Director Since | |||||||
J M Schubert(1) | 62 | Chairman | 1991 | |||||||
R J Norris(2) | 56 | Chief Executive Officer | 2005 | |||||||
R J Clairs, AO | 67 | Director | 1999 | |||||||
A B Daniels OAM | 70 | Director | 2000 | |||||||
C R Galbraith, AM | 57 | Director | 2000 | |||||||
W G Kent, AO | 69 | Director | 2000 | |||||||
F D Ryan | 62 | Director | 2000 | |||||||
F J Swan | 64 | Director | 1997 | |||||||
B K Ward | 51 | Director | 1994 | |||||||
S C Kay | 44 | Director | 2003 | |||||||
D V Murray(3) | 56 | Chief Executive Officer | 1992 | |||||||
J T Ralph, AC(4) | 72 | Chairman | 1985 | |||||||
N R Adler, AO(4) | 60 | Director | 1990 |
(1) | Appointed 5 November 2004 | |
(2) | Commenced 22 September 2005 | |
(3) | Retired 22 September 2005 | |
(4) | Retired 5 November 2004 |
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231
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• | Terrorists and their sponsors |
• | The former Iraqi regime |
232
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§ | a dealer in securities, |
§ | a trader in securities that elects to use a mark-to-market method of accounting for securities holdings, |
§ | a tax-exempt organisation, |
§ | a life insurance company, |
§ | a person liable for alternative minimum tax, |
§ | a person that actually or constructively owns 10% or more of the voting stock of the Commonwealth Bank of Australia, |
§ | a person that holds Ordinary Shares as part of a straddle or a hedging or conversion transaction, or |
§ | a US Holder (as defined above) whose functional currency is not the U.S. dollar. |
§ | Shares held as part of a trade or business conducted through a permanent establishment in Australia. In such a case any profit on disposal would be assessable to ordinary income tax. Losses would constitute allowable deductions. |
§ | Shares held in public companies where such shares represent (or in the past five years have represented) a holding of 10% or more in the issued share capital of the company. In such a case capital gains tax would apply, but not otherwise. |
233
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234
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1 | Company Objects and Purposes |
2 | Directors Powers and Qualifications |
(a) | Unless permitted by the Corporations Act, no director is permitted to vote or be counted in the quorum as a director in respect of any contract or arrangement in which the director has a material personal interest (article 11.8(g)). Subject to the ASX Listing Rules, this prohibition does not apply if the directors pass a resolution stating they are satisfied that the interest should not disqualify the director from considering or voting on the matter (article 11.8(h)). If a quorum of directors is not available to consider such a resolution then, subject to the Corporations Act, the prohibition can be relaxed or suspended by an ordinary resolution passed in a general meeting (section 195(4)). |
(b) | Subject to the ASX Listing Rules, the non-executive directors’ remuneration is paid by way of fees in such proportion and manner as the directors determine, provided that the aggregate remuneration paid to non-executive directors must not exceed the amount approved from time to time in a general meeting. The directors may approve payment of special remuneration where a director, other than the managing director or an executive director, performs extra services or makes any special exertions for any business or purposes of the Company. In addition, the directors may also be paid an allowance for travelling and other expenses properly incurred by them in attending and returning from meetings or otherwise in connection with the exercise of their powers and the discharge of their duties or the business of the Company (article 11.6). |
(c) | The directors may, from time to time, at their discretion, exercise all the powers of the Company to borrow or raise money or charge any property or business of the Company and to issue debentures or give any other security for a debt, liability or obligation of the Company or of any other person (article 12.1(b)). Subject to the Corporations Act, this article could be changed by a special resolution, that is, a resolution passed by at least 75% of the votes cast by shareholders entitled to vote on the resolution (section 136). |
(d) | The Constitution does not contain any age limit requirement for the retirement of directors. Similarly, the Corporations Act does not contain any such requirement. The policy of the board of directors of the Company is that a director cannot stand for re-election after attaining the age of 70. |
(e) | A director does not need to own shares in the Company as a qualification for office (article 11.3(b)). |
3 | Rights, Preferences and Restrictions Attaching to Each Class of Shares |
(a) | (i) | The rights attached to ordinary shares include the right to dividends in the event that the directors declare a dividend or determine that a dividend is payable, and fix the amount and the time for payment (article 16.1(a)). All dividends declared or payable but unclaimed may be invested by the directors as they think fit for the benefit of the Company until claimed or until required to be dealt with in accordance with any law relating to unclaimed moneys (article 16.5(f)). |
(ii) | Subject to the Constitution, the ordinary shareholders have the right to vote in person, by representative, attorney or proxy in a general meeting. On a show of hands each shareholder (regardless of the number of shares held) has one vote. On a poll, each shareholder has one vote for each fully paid ordinary share held. In respect of partly paid shares, the shareholder has a vote equivalent to the proportion which the amount paid up on the shares has to the total issue price of the shares at the date the poll is taken. For the purpose of determining voting entitlements at a general meeting, shares will be taken to be held by those persons recorded in the register of members at the time and the date determined by the directors under regulation 7.11.37 of the Australian Corporations Regulations 2001. One third of current directors (other than the managing director) must retire at each annual general meeting and may be re-elected by ordinary resolution and in accordance with the Constitution (articles 11.1(c) and 11.2(b)). |
(b) | The rights attached to the Company’s preference shares are referred to in a prospectus dated 26 February 2001 for the issue of 3.5 million preference shares at an issue price of AUD200 each, payable in full on application. Preference shareholders are entitled to a dividend to be paid in priority to dividends on ordinary shares. In certain limited circumstances, dividends may not be payable. The preference shares are perpetual and exchangeable into ordinary shares in certain circumstances. They are resettable on certain dates. The Company may not issue shares ranking in priority to these shares without prior approval of the holders of preference shares. There is no right to vote at general meetings except in limited circumstances specified in the terms and conditions as set out in the prospectus. The Trust Preferred Securities issued on 6 August 2003, as described on page 227, are exchangeable in certain circumstances for preference shares of the Company that will rank equally with the preference shares described above. |
(c) | Dividends are only payable out of the profits of the Company (Corporations Act section 254T). |
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(d) | In the event of a winding up, ordinary shares rank equally in the division of any surplus. The preference shares rank in priority to ordinary shares for payment of dividends and for a return of capital on a winding up of the Company. If the Company is wound up the liquidator may, with the sanction of a special resolution, divide among the members in kind the whole or any part of the property of the Company and may determine how the division is to be carried out between the members or different classes of members (article 20). |
(e) | Shareholders cannot redeem ordinary shares. Preference shares may be redeemable by the Company in accordance with the terms of issue determined by the directors (article 3.2.6). |
(f) | The directors may issue preference shares with such rights to dividends as set out in article 3.2.3 and as specified in the terms of issue, including a right to cumulative or non-cumulative dividends, and in either case with no additional dividend rights or with additional dividend rights in certain circumstances, or the directors may issue preference shares with no right to dividends. |
(g) | The holders of fully paid ordinary shares have no further liability to the Company in respect of those shares. Subject to the terms of issue, the holders of partly paid shares are liable to the Company once a call is made for the payment of the unpaid amount (article 4.1). |
(h) | There is no provision in the Constitution which discriminates against an existing or prospective shareholder as a result of such shareholder owning a substantial number of shares. |
4 | Alteration of rights of shareholders |
5 | Meetings |
6 | Limitations on the Right to Own Securities |
(a) | The Constitution does not impose limitations on the right to own securities except those provisions relating to minimum holdings (known as unmarketable parcels). The Constitution also provides that the directors may decline to register any transfer of shares where this is permitted by the ASX Listing Rules (article 7.3(a)). Relevantly, the ASX Listing Rules allow the company to decline to register a transfer if the transfer may breach an Australian law and the ASX has agreed in writing to the non-registration. The directors might also exercise their discretion to refuse to allot shares to a person where the allotment may breach an Australian law. Relevant Australian legislation which impacts on the right to own securities is described below. |
(b) | Unmarketable Parcel Rationalisation Scheme | |
The Constitution contains a scheme whereby the Company can sell the shares of members who hold less than a marketable parcel of shares in the Company as determined by the ASX Listing Rules. The scheme sets out notice requirements that the Company must comply with prior to selling any shares (article 5.4). |
(c) | Legislation | |
The Australian Financial Sector (Shareholdings) Act 1998 restricts ownership by people (together with their associates) of an Australian bank to 15% of the total voting shares outstanding. A shareholder may apply to the Australian Treasurer to extend its ownership beyond 15%, but approval will not be granted unless the Treasurer is satisfied that a holding by that person greater than 15% is in the national interest. | ||
Section 50 of the Australian Trade Practices Act 1974 prohibits an acquisition of shares that would have the effect, or be likely to have the effect, of substantially lessening competition in a substantial market for goods or services, unless the acquisition is authorised by the Australian Competition and Consumer Commission. | ||
The rights of non-resident or foreign shareholders to hold the Company’s securities are subject to the Australian Foreign Acquisitions and Takeovers Act 1975. The Treasurer of the Australian Federal Government has the power to prohibit the acquisition of a controlling interest in an Australian company by a foreign person or foreign persons, if the Treasurer is of the opinion that the acquisition would be contrary to the national interest. For this purpose, a shareholding of 15% or more held by a single foreign person (including associates) or 40% or more held by 2 or more foreign persons (including associates) is deemed to constitute a controlling interest. |
7 | Takeover Limitations | |
Not applicable. | ||
8 | Disclosure of Share Ownership |
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9 | Changes in Share Capital |
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COMMONWEALTH BANK OF AUSTRALIA (Registrant) | ||||||
By | /s/ Michael Cameron | |||||
Name: | Michael Cameron | |||||
Title: | Chief Financial Officer | |||||
Date: | 14 December 2005 |
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Table of Contents
1. | Constitution as amended as of 5 November 2004. | |
4.1 | Employment Agreement between Commonwealth Bank of Australia and Stuart Ian Grimshaw, dated as of 1 February 20021. | |
4.2 | Employment Agreement between Commonwealth Bank of Australia and Peter Leith Polson, dated as of 1 January 20022. | |
4.3 | Employment Agreement between Commonwealth Bank of Australia and John O’Sullivan, dated as of 28 April 2003.3 | |
4.4 | Employment Agreement between Commonwealth Bank of Australia and Grahame Petersen, dated as of 22 June 2004.4 | |
4.5 | Employment Agreement between Commonwealth Bank of Australia and Hugh Harley, dated as of 13 September 1999, amended 16 October 20025. | |
4.6 | Employment Agreement between Commonwealth Bank of Australia and Michael Cameron, dated as of 6 November 2002 and amended 18 March 2003 and 4 November 2003.6 | |
4.7 | Employment Agreement between Commonwealth Bank of Australia and Ralph Norris, dated as of 14 June 2005. | |
4.8 | Terms of appointment as a non-executive director between Commonwealth Bank of Australia and John M Schubert, dated as of 14 July 2005. | |
4.9 | Terms of appointment as a non-executive director between Commonwealth Bank of Australia and Reg J Clairs, dated as of 14 July 2005. | |
4.10 | Terms of appointment as a non-executive director between Commonwealth Bank of Australia and AB (Tony) Daniels, dated as of 14 July 2005. | |
4.11 | Terms of appointment as a non-executive director between Commonwealth Bank of Australia and Colin R Galbraith, dated as of 14 July 2005. | |
4.12 | Terms of appointment as a non-executive director between Commonwealth Bank of Australia and S Carolyn Kay, dated as of 14 July 2005. | |
4.13 | Terms of appointment as a non-executive director between Commonwealth Bank of Australia and Warwick G Kent, dated as of 14 July 2005. | |
4.14 | Terms of appointment as a non-executive director between Commonwealth Bank of Australia and Fergus D Ryan, dated as of 14 July 2005. | |
4.15 | Terms of appointment as a non-executive director between Commonwealth Bank of Australia and Frank J Swan, dated as of 14 July 2005. | |
4.16 | Terms of appointment as a non-executive director between Commonwealth Bank of Australia and Barbara K Ward, dated as of 14 July 2005. | |
4.17 | Equity Reward Plan Rules, Exercise and Vesting Conditions, Taxation Information Sheet — Options and Taxation Information Sheet — Shares7. | |
8. | List of controlled entities. | |
11. | Code of Ethics for Senior Financial Officers.8 | |
12. | Chief Executive Officer and Chief Financial Officer certifications. | |
13. | Chief Executive Officer and Chief Financial Officer certifications. | |
14. | Consent of Ernst & Young. |
Copies of any instrument relating to long-term debt of the Commonwealth Bank of Australia that is not being attached as an exhibit to this Annual Report on Form 20-F and which does not exceed 10% of the total combined assets of the Commonwealth Bank of Australia will be furnished to the SEC upon request. |
1 | Incorporated by reference to Exhibit 4.2 to the Annual Report on Form 20-F for the registrant’s fiscal year ended 30 June 2002 (File No. 0-29152) filed on 18 October 2002. | |
2 | Incorporated by reference to Exhibit 4.3 to the Annual Report on Form 20-F for the registrant’s fiscal year ended 30 June 2002 (File No. 0-29152) filed on 18 October 2002. | |
3 | Incorporated by reference to Exhibit 4.3 to the Annual Report on Form 20-F for the registrant’s fiscal year ended 30 June 2004 (file No.0-29152) filed on 1 December 2004. | |
4 | Incorporated by reference to Exhibit 4.4 to the Annual Report on Form 20-F for the registrant’s fiscal year ended 30 June 2004 (file No.0-29152) filed on 1 December 2004. | |
5 | Incorporated by reference to Exhibit 4.5 to the Annual Report on Form 20-F for the registrant’s fiscal year ended 30 June 2004 (file No.0-29152) filed on 1 December 2004. | |
6 | Incorporated by reference to Exhibit 4.6 to the Annual Report on Form 20-F for the registrant’s fiscal year ended 30 June 2004 (file No.0-29152) filed on 1 December 2004. | |
7 | Incorporated by reference to Exhibit 4.1 to the Annual Report on Form 20-F for the registrant’s fiscal year ended 30 June 2002 (File No. 0-219152) filed on 18 October 2002. | |
8 | Incorporated by reference to Exhibit 11 to the Annual Report on Form 20-F for the registrant’s fiscal year ended 30 June 2004 (file No.0-29152) filed on 1 December 2004. |
239
Table of Contents
Head Office
Commonwealth Bank of Australia
48 Martin Place
Sydney NSW 1155
Telephone: (612) 9378 2000
ASB Bank Limited
Level 28, ASB Bank Centre
135 Albert Street, Auckland
Telephone: (649) 377 8930
Facsimile: (649) 358 3511
Managing Director
H Burrett
33-45 Hurstmere Road
Takapuna, Auckland
Telephone: (649) 487 9000
Facsimile: (649) 486 1913
Managing Director
B Chapman
Fiji Islands
Colonial National Bank
Colonial Life Limited
3 Central Street, Suva
Telephone: (679) 3214 400
Facsimile: (679) 3303 448
Managing Director
M Walsh
CBA Representative Office
2909 China World Tower 1
China World Trade Centre
1 Jian Guo Men Wai Avenue
Beijing 100004
Telephone: (86 10) 6505 5350
Facsimile: (86 10) 6505 5354
Group Chief Representative
Y T Au
Room 4007 Bund Center
222 Yan An Road East
Shanghai 200002
Telephone: (86 21) 6335 1686
Facsimile: (86 21) 6335 1766
Group Chief Representative
Y T Au
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
CBA – IFS
Room 3805-3806 Kwah Centre
1010 Huaihai Mid Road
Shanghai 200031
Telephone: (86 21) 6103 6500
Facsimile: (86 21) 6103 6598
General Manager Business Development
Richard Williamson
CBA – IFS
1501-1505, Chater House
8 Connaught Road, Central, Hong Kong
Telephone: (852) 2844 7575
Facsimile: (852) 2805 0169
General Manager Business Development
Richard Williamson
CBA — PBS
1501-05, Chater House
8 Connaught Place, Central
Hong Kong
Telephone: (852) 2844 7500
Facsimile: (852) 2845 9194
Regional General Manager Asia
SRJ Holden
12th Floor CMG Asia Tower
The Gateway, 15 Canton Road
Kowloon
Tsimshatsui
Telephone: (852) 2861 4006
Facsimile: (852) 2520 1119
Regional Managing Director
P Fancke
Level 6, Three Exchange Square
8 Connaught Place, Central
Hong Kong
Telephone: (852) 2846 7555
Facsimile: (852) 2868 4742/4783
Chief Executive Officer, First State International
T Waring
PT Bank Commonwealth
Level 2, Wisma Metropolitan II
Jl. Jendral Sudirman Kav. 29-31
Jakarta 12920
Telephone: (6221) 5296 1222
Facsimile: (6221) 5296 2293
President Director
S Brewis-Weston
11/F Sentra Mulia
Jl. H.R. Rasuna Said, Kav X-6 No 8
Jakarta 12940
Telephone: (6221) 250 0385
Facsimile: (6221) 250 0389
President Director
Malakai Naiyaga
29th Floor, Gedung Artha Graha
Sudirman Central Business District
Jl. Jend. Sudirman Kav. 52-53
Jakarta 12190
Tel: 62 21 515 0088
Tel: 62 21 515 0033
Chief Executive Officer, First State International
T Waring
CBA Branch Office
8th Floor
Toranomon Waiko Building
5-12-1 Toranomon
Minato-ku, Tokyo 105-0001
Telephone: (813) 5400 7280
Facsimile: (813) 5400 7288
General Manager — Japan
L Xia
CBA Branch Office
3 Temasek Avenue
#20-01 Centennial Tower
Singapore 039190
Telephone: (65) 6349 7000
Facsimile: (65) 6224 5812
General Manager
Rob Buchan
3 Temasek Avenue
#20-01 Centennial Tower
Singapore 039190
Telephone: (65) 6538 0008
Facsimile: (65) 6538 0800
Chief Executive Officer – 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
Chief Representative
SRJ Holden
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
CBA Branch Office
Level 17, 599 Lexington Avenue
New York NY 10022
Telephone: (1 212) 848 9200
Facsimile: (1 212) 336 7725
Executive Vice President, Head of North America
Laurie C Tuzo
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
Paul Orchart
3rd Floor, 30 Cannon Street
London EC4M 6YQ
Telephone: (44 20) 7332 6500
Facsimile: (44 20) 7332 6501
Chief Executive Officer, First State International
T Waring
23 St Andrew Square
Edinburgh EH2 1BB
Telephone: (44 131) 473 2200
Facsimile: (44 131) 473 2222
Chief Executive Officer, First State International
T Waring
240