#1NOT FOR RELEASE IN THE UNITED STATES: This presentation is not for distribution or release in the United States or to any U.S. person and may not be forwarded, reproduced, disclosed or distributed in whole or in part to any other person. Commonwealth Bank of Australia Determined to offer strength in uncertain times Acquisition of BankWest and St. Andrew's Australia - A Compelling Strategic Growth Opportunity Investor Pack 8 October 2008 Commonwealth Bank of Australia ACN 123 123 124 Determined to be different This presentation does not constitute an offer of securities for sale in Australia, the United States or elsewhere and any securities described in this presentation may not be offered or sold in Australia, the United States or elsewhere absent registration under the relevant legislation or an exemption from registration.#2Important notices The information contained in this presentation is current as at 8 October 2008 (unless otherwise stated) and could change. The information in this presentation remains subject to change without notice. Circumstances may change and the contents of this presentation may become outdated as a result. The information contained in this presentation is given in summary form. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate. Certain statements contained in this presentation may constitute forward-looking statements or statements about future matters. These statements involve known and unknown risks, uncertainties and other factors that may cause CBA's actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these statements. Forward-looking statements or statements about future matters by their very nature, are subject to uncertainty and contingencies many of which are outside the control of CBA. Past performance is not a reliable indication of future performance. The information in this presentation (including any forecast information) does not constitute an offer or invitation for subscription, nor purchase of, nor a recommendation in relation to holding, purchasing or selling shares, securities or other instruments in CBA in any jurisdiction. This presentation is not a prospectus nor an offer of shares for subscription or sale in any jurisdiction. In particular, this presentation does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or to any U.S. person, as defined in Regulation S under the U.S. Securities Act of 1933, as amended (the U.S. Securities Act). Securities may not be offered or sold in the United States, or to or for the account of any U.S. person (as defined in Regulation S under the U.S. Securities Act) unless an exemption from registration is available. By accepting this presentation you represent and warrant that you are entitled to receive such presentation in accordance with the above restrictions and agree to be bound by the limitations contained herein. 2 Determined to be different#3Contents Overview Strategic rationale Summary Appendix Determined to be different#4Summary BankWest and St. Andrew's Australia only Consistent with CBA strategy Attractive price and terms: ➤ Purchase price $2.1bn 0.80 x 2007A book value 1 11.2 x 2007A net profit 2 ■ Expected to be EPS accretive immediately Substantial cost synergies 1. Ordinary shareholders' equity. 2. Profit attributable to equity holders, after dividends on Redeemable Preference Shares. 4 Determined to be different#5A compelling strategic growth opportunity ■ Significantly expanded presence in fast-growing WA market BankWest a well recognised brand Reinforces strong market position in Australian financial services Enhanced retail deposit base provides funding advantage ■ Expected to be funded by $2bn institutional equity placement that will maintain APRA Tier 1 capital at 7.6% and Tier 1 capital under UK FSA rules at 10.1% ■ Significant value for CBA shareholders 5 Determined to be different#6Key terms and conditions Final purchase price to not exceed $2.1bn Sale and purchase agreement signed ■ Subject to regulatory, ACCC and Govt approvals (discussions commenced) HBOS plc shareholder approval not required Does not require CBA shareholder approval ■Completion expected end January 2009 6 Determined to be different#7Contents Overview Strategic rationale Summary Appendix Determined to be different#8Expanded presence in fast growing WA market WA Distribution Footprints 1 Branches CBA BankWest 100 CBA/BankWest 177 28 No. 77 WBC/SGB 107 ANZ 81 NAB 72 ATMs CBA 275 2 BankWest 366 CBA/BankWest 641 Business Banking Centres CBA BankWest CBA/BankWest 10 28 38 1. Source: APRA (June 2007), BankWest website, and HBOS Australia 31 December 2007 annual report. 2. BankWest numbers may include third party arrangements. 8 Determined to be different#925% 22.7% 21.3% 19.7% 20% 15% 10% 5% 0% CBA/BankWest Reinforces strong Australian market position Home Lending Market Shares - Australia Household Deposits Credit Cards WBC/SGB CBA 40% 33.7% 35% 30% 25% 12.2% 13.2% 20% 15% 10% 3.0% 5% 0% ANZ Personal Lending 30% 25.1% 25% 21.9% 20% 15% 10% 5% 0% CBA/BankWest WBC/SGB CBA NAB BankWest 16.1% 11.0% 10% 5.8% 5% ANZ Source: APRA / RBA (July 2008). NAB CBA/BankWest WBC/SGB 29.7% 22.3% CBA ANZ 30% 24.9% 26.2% 25% 21.7% 20.5% 20% 14.1% 15% 12.9% 13.0% 10% 4.0% 5% 0% Business Lending NAB BankWest CBA/BankWest WBC/SGB 25% 25% 21.6% 22.8% 20% 18.8% 18.9% 20% 16.4% 15.8% 14.1% 15% 15% BankWest 0% CBA/BankWest WBC/SGB m CBA ANZ NAB BankWest 10% 4.7% 5% 0% CBA/BankWest WBC/SGB CBA ANZ Business Deposits 21.5% 15.9% 17.6% 21.9% CBA ANZ NAB Determined to be different BankWest 5.7% NAB BankWest 3.2%#10Snapshot of merged operations CBA BankWest & St. Andrew's Australia Combined Branches 1,011 148 1 1,159 Loans and Advances ($bn) 365 2 55 3 420 Customer Deposits ($bn) 262 4 37 3 299 Funds Under Administration ($bn) 185 21 187 Market Share - Total Lending Market Share - Home Loans 5 5 21% 4% 25% 20% 3% 23% Market Share - Deposits 5 30% 4% 34% Customers 10 million 0.9 million 6 10.9 million Staff (FTE) 39,600 5,000 7 44,600 1. Source: BankWest website, HBOS plc 30 June 2008 interim report, and HBOS Australia 31 December 2007 annual report. 2. Gross loans, advances and other receivables, as at 30 June 2008. 3. Lending and Deposits attributable to Retail and Commercial Business segments of HBOS' International - Australia division. Data as at 30 June 2008. 4. Comprises: Certificates of Deposit, Term Deposits, On Demand and Short Term Deposits, and Deposits not Bearing Interest. Data as at 30 June 2008. 5. Source: APRA (July 2008). 6. BankWest customers only. Source: BankWest website. 7. This includes people from BankWest Retail, BankWest Business, St Andrew's and those group functions which support these businesses 10 Determined to be different#11An exciting addition to CBA brands Banking Commonwealth Bank Funds Mgt Colonial First State ASB Bank West CommmSec 11 FirstChoice Insurance CommInsure SOVEREIGN Determined to be different#12Proposed operating model Business Description ■ 860,000 customers ☐ Lending assets of $28bn 999 BankWest Retail Banking ☐ Deposits of $15bn better leal BankWest Business Business & Corporate Banking St Andrew's AUSTRALIA Insurance and Investments ■ 2008 Regional Bank of the Year 1 ■ 77 Business Banking Centres ◉ 2 Lending assets of $27bn Deposits of $22bn ■ Wealth management and insurance ■ Funds under Management of more than $2.4bn Proposed Model ■ Brand retained in WA ■ East coast retail expansion strategy to be reviewed Streamlining of administrative functions, systems, and processes of CBA and BankWest, where synergies exist and it enhances the customer experience to do so ■ Brand retained in WA ■ Integration of two businesses with a view to incorporating best practice and enhancing customer experience across the Group Streamlining/sharing of back-office and systems where synergies exist Integrated into broader Group Note: All Lending Assets and Deposits figures as at 30 June 2008. (Source: HBOS plc interim report). Funds under management figure as at 31 December 2007. (Source: HBOS Australia 31 December 2007 annual report). Exchange rate of 2.08 AUD to 1 GBP. 1. Australian Banking and Finance Magazine. 2. Source: BankWest website. 12 Determined to be different#13Significant shareholder value creation ■ Expected to be EPS accretive immediately ■ Incremental growth/revenue opportunities in fast-growing WA market Platform for new products, enhanced service delivery ■ Cost/efficiency synergies Complements CBA's strategy 13 Determined to be different#14Cost synergies expected to be substantial ■BankWest's cost-to-income ratio is 67.6% versus 48.9%² for CBA Annual pre-tax cost synergies estimated to be at 20-25% of BankWest's cost base ■ Synergy opportunities: Streamlined support functions Merged technology platform (aligned with Core Banking) Review of BankWest east coast retail expansion strategy Estimated integration costs are ~1.5 times the first year of fully maintainable cost synergies 1. For the financial year ended 31 December 2007. 2. For the financial year ended 30 June 2008. 14 Determined to be different#15Risks well understood Risk Customer attrition Integration Funding Regulatory Mitigants ■ Minimising customer loss the number one priority ☐ BankWest brand to be retained Expanded distribution options for CBA and BankWest customers ■ Enhanced product range available to customers Strong organisational learnings and expertise (SBV, Colonial) ■ Disciplined programme management & governance CBA well capitalised with significant excess liquidity ■ CBA funding is well diversified Credit ratings recently confirmed with stable outlook Dialogue underway with relevant authorities 15 Determined to be different#16Contents Overview Strategic rationale Summary Appendix 16 Determined to be different#17Summary BankWest and St. Andrew's Australia only Consistent with CBA strategy Attractive price and terms: ➤ Purchase price $2.1bn 0.80 x 2007A book value 1 11.2 x 2007A net profit 2 Expected to be EPS accretive immediately ■ Substantial cost synergies 1. Ordinary shareholders' equity. 2. Profit attributable to equity holders, after dividends on Redeemable Preference Shares. 17 Determined to be different#18Contents Overview Strategic rationale Summary Appendix 18 Determined to be different#19Comparable banking transactions Comparable price-to-book values (Acquiror Target) Westpac / St. George Bendigo/Adelaide Comparable price-to-earnings multiples (LTM) (Acquiror Target) 2.7x Bank of Queensland / Bendigo 2.6x Bendigo/Adelaide 21.1x 19.0x Bank of Queensland / Bendigo St. George /Advance HBOS/BankWest I Suncorp / Metway 1.7x I I I Westpac Bank of Melbourne 1.7x CBA Colonial Colonial / Trust Bank 1.1x 2.1x 1.9x CBA / BankWest & 0.8x St. Andrew's Australia. Precedent average: 1.9x 2.5x Source: Company announcements, ASX announcements, Factset, IRESS. 1. Remaining 43% interest by HBOS. 19 CBA Colonial 18.0x Westpac / St. George 16.8x Westpac Bank of Melbourne 16.5x Suncorp/Metway 16.3x Colonial / Trust Bank 16.0x HBOS/BankWest1 St. George /Advance CBA BankWest & St. Andrew's Australia 11.2x 15.5× 14,7x Precedent average: 16.6x Determined to be different#20BankWest overview About BankWest History 1895: Established by the Western Australian Government, as the Agricultural Bank of WA, to assist in developing the State's farming industry 1945: Commenced operations as a trading bank 1994: Acquired by the Bank of Scotland, with a related public listing of 49% on the ASX ■2003: HBOS plc acquired the remaining shares and BankWest was de-listed Operations Funding mix vs peers 100% 90% 80% 70% 42% 37% 41% 47% 48% 49% 60% 50% 40% 30% 20% 63% 58% 59% 53% 52% 51% 10% 0% CBA NAB WBC ANZ BankWest 'Pro Forma I Customer Deposits ■Wholesale Funding Funding mix June 2008 Market leader in WA More than 860,000 customers Offers a range of retail and business banking products East coast retail expansion program Customer Accounts, 63% Source: Company filings, regulatory filings, and investor presentations. Note: Funding mix data as of most recent company filings, 31 March 2008, except for BankWest (30 June 2008), and CBA (30 June 2008). Figures rounded to nearest integer. 20 20 Intragroup _deposits, 22% Debt securities, 8% Subordinated liabilities, 2% _Other, 5% Determined to be different#21BankWest Financial Overview 2005 2006 2007 Unaudited 6 months $m $m $m to June 2008 Net interest income Non interest income 609 716 857 487 213 208 279 176 Net operating income 822 924 1,136 663 Administrative expenses (509) (555) (728) N/A Depreciation, amortisation and impairment (27) (34) (40) N/A Operating expenses (536) (589) (768) (458) Share of profits of associated undertakings 6 3 2 (0) Impairment losses on loans and advances (15) (58) (88) (83) Profit before income tax 277 280 282 122 Income tax expense (84) (87) (78) N/A Profit for the period 193 193 204 N/A NIM 1.79% 1.76% 1.66% 1.61% Cost/Income 65.2% 63.8% 67.6% 69.1% Impairment/average loans 0.05% 0.16% 0.19% 0.28% Source: BankWest financial reports for the years ended 31 December 2005, 2006 and 2007. 21 Determined to be different#22BankWest Balance Sheet 2005 2006 2007 Unaudited $m $m $m June 2008 Loans and advances to customers 31,582 40,276 50,838 55,500 Other assets 5,058 5,398 7,974 7,700 Total assets 36,667 45,674 58,812 63,200 Customer deposits & Intergroup funding 28,482 35,197 45,899 50,800 Other interest bearing liabilities 5,993 7,723 9,385 8,700 Non interest bearing liabilities 413 505 478 300 Total liabilities 34,888 43,425 55,762 59,800 Issued share capital (incl preference shares) 992 1,282 1,907 2,100 Retained earnings 787 967 1,143 1,300 Total equity1 1,779 2,249 3,050 3,400 Total liabilities and equity 36,667 Source: BankWest financial reports for the years ended 31 December 2005, 2006 and 2007. 1 Includes redeemable preference shares 2007: $530m, 2006: $305m, 2005: $115m. 22 22 45,674 58,812 63,200 Determined to be different#23St. Andrew's Australia overview About St. Andrew's Australia Background St. Andrew's Australia Pty Ltd ("SAA") began operations in Australia in 1998 Through six subsidiaries, SAA operates two major lines of business: Insurance and Wealth Management In 2007, SAA acquired Whittaker Macnaught, a leading financial planning business based in Queensland Operations Distributes bancassurance, wealth and insurance products through its branch network and 651 financial advisors, as well as through BankWest branches, direct mail, telemarketing and the internet Wealth Management boasts Funds under Management and Advice of over A$2.4bn Source: Company filings for the year ended 31 December 2007, company website, and HBOS Australia 31 December 2007 annual report. 1. As last reported. Source: InvestorDaily (11 December 2007). 23 St. Andrew's Australia Pty Ltd Subsidiaries 100% St. Andrew's Financial Services Pty Ltd 100% St. Andrew's Insurance (Australia) Pty Ltd 100% 100% 100% St. Andrew's Life Insurance Pty Ltd St. Andrew's Superannuation Services Pty Ltd St. Andrew's Wealth Management Ltd 100% Whittaker Macnaught Pty Ltd Determined to be different#24CBA funding position very strong BankWest intra-group funding of ~$18bn easily accommodated within existing CBA internal resources Overview of CBA funding position: AA credit rating 58% retail funded Well advanced in 2009 funding programme – 30% completed - Significant surplus liquids CBA's Existing Source of Funding¹ Retail Funding 58% Short Term Wholesale Structured Funding with first call <12mth 21% 2% 5% 11% 3% Long Term Wholesale maturing in FY09 Long Term Wholesale maturing after FY09 Securitisation CBA's Liquid Assets ($bn)² 50 13 Medallion RMBS 28 10 Surplus liquids 3 25 25 27 27 Minimum prudential requirement 1. Surplus liquids are excluded from short term wholesale funding. 2. 6 month average liquid assets held. 24 24 Jun 07 Jun 08 Determined to be different#25Capital ratios maintained 10.0% Integration - Tier 1 Capital International Peer Comparison 12.0% Tier 1 Capital Ratios 11.0% 9.0% 1.3% 0.3% 8.8% 10.1% 10.1% 0.9% 10.0% 8.2% 0.6% 8.0% 7.0% 7.6% 9.0% 0.1% 7.6% 8.0% 7.6% 7.0% 8.7% 6.0% 6.0% Tier 1 Jun 08 $16,791m IRRBB RWA increase Tier 1 Capital Jun 08 raising (incl IRRBB) $2,000m $16,791m Residual 1 capacity $667m Tier 1 post raising $19,458m RWA 2 Net gain 3 Tier 1 increase on acquisition pro-forma from $270m post acquisition BankWest $19,728m CBA (APRA) incl IRRBB CBA (UK FSA) 1 CBA (UKFSA) 2 pro-forma post acquisition European Bank average 1. Transfer from Tier 2 capital of excess hybrid capacity due to equity raising. 2. Estimated risked weighted assets under Basel I, capital impact of moving to Basel II expected to be immaterial. 3. Discount on acquisition net of integration costs. 1. Normalised CBA capital calculation to UK, Financial Services Authority, as benchmark. 2. Pro-forma June 2008 Tier 1 (UK FSA) post acquisition. 25 Determined to be different#26Estimate Financial Impact of Acquisition¹ Net Assets $m Pre-tax Profit/ (Loss) $m Indicative fair value of net assets acquired 2,720 Consideration paid (2,100) Discount on acquisition 620 Transaction costs (20) Day 1 gain through P&L 600 Integration & restructuring provision Comprising: ■ Restructuring costs. ◉ Technology integration expenditure Other transition costs 1 Subject to finalisation of completion accounts. (330) (330) ■ Fair value of acquired net assets to be finalised ■ Gain on acquisition and Integration provision to be excluded from Cash NPAT ■ Year 1 (2009) CBA P&L/EPS positive ■ Integration provision 150% of maintainable cost savings 26 Determined to be different#27Customer satisfaction 80.0% 70.0% Roy Morgan Research Customer Satisfaction - Retail Banking 60.0% Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Nov-06 Oct-06 Source: Roy Morgan Research. Aust Main Financial Institution (MFI) Population 14+, % "Very" or "Fairly Satisfied" (6 month rolling average). Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 27 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 ANZ CBA NAB SGB WBC BankWest Determined to be different#28CBA Market Update Comfortable with the current range of analysts' cash 2009 NPAT forecasts; ■ ABC Learning listed notes marked down (2009 NPAT impact of ~ • $100m); ■As announced, collection is doubtful on Lehman exposures (potential 2009 NPAT impact of ~ $100m); 2 ■■Book quality remains sound: no systemic issues in consumer or commercial book; ■No major new problem accounts identified in current year; ■ Significant growth in domestic deposits of $12 billion up 5% in only two months; ■Well ahead of long term wholesale funding plan with $7.7bn raised since July; ■High level, exploratory discussion with Suncorp-Metway - not currently involved in sales process; and ■Standard & Poor's, Moody's and Fitch have all confirmed the Group's credit ratings with stable outlook, following the acquisition of BankWest. 28 Determined to be different#29NOT FOR RELEASE IN THE UNITED STATES: This presentation is not for distribution or release in the United States or to any U.S. person and may not be forwarded, reproduced, disclosed or distributed in whole or in part to any other person. Commonwealth Bank of Australia Determined to offer strength in uncertain times Acquisition of BankWest and St. Andrew's Australia - A Compelling Strategic Growth Opportunity Investor Pack 8 October 2008 Commonwealth Bank of Australia ACN 123 123 124 Determined to be different This presentation does not constitute an offer of securities for sale in Australia, the United States or elsewhere and any securities described in this presentation may not be offered or sold in Australia, the United States or elsewhere absent registration under the relevant legislation or an exemption from registration.