Commonwealth Bank of Australia
2024
Annual Report
Contents
Overview
2024 highlights
2
Who we are
4
How we create value
6
Chair and CEO’s message
8
Additional information
Security holder information
299
Five-year financial summary
307
Profit reconciliation
310
Glossary of terms
312
Important notices
328
Contact us
329
The release of this announcement was authorised by the Board.
Commonwealth Bank of Australia
Commonwealth Bank Place South, Level 1, 11 Harbour Street, Sydney NSW 2000 | ACN 123 123 124 | 14 August 2024 100/2024
Creating value
Delivering on our strategic priorities
10
Our commitment to sustainability
20
Sustainability performance
48
Financial performance
60
Managing our risks
70
Our approach to corporate governance
80
Directors’ report
Directors’ report
98
Remuneration report
104
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Financial report
Financial statements
135
Notes to the financial statements
143
Consolidated Entity Disclosure Statement 286
Directors’ declaration
289
Independent auditor’s report
290
Helping build Australia’s
future economy
Our focus on balance sheet strength and managing
capital provides capacity to support our customers
and the nation, while still delivering sustainable
returns to shareholders.
Learn more on page 12.
Personalising customer
experiences
Our long-term investment in technology enables our
digital leadership. Central to our customer approach
is our market-leading app, which provides simplified
and personalised customer experiences.
Learn more on page 14.
Acknowledgment of Country
Commonwealth Bank of Australia respectfully acknowledges the Traditional Owners
of the Lands across Australia as the continuing custodians of Country and Culture.
We pay our respects to First Nations peoples and their Elders, past and present.
Our registered office is located on the Lands of the Gadigal People.
Supporting our customers and
helping them achieve their life goals.
We remain committed to supporting our customers
and the nation as cost of living pressures continue.
As a trusted financial partner for many Australians,
our focus is helping our customers achieve their
goals, whether it be saving for the future, buying
a home, or starting and growing a business.
We aim to support our customers in moments
that matter and help build a more prosperous,
sustainable and resilient future, together.
Building a brighter future for all.
Access our full reporting suite online at commbank.com.au/investors
See our Corporate Governance Statement
at commbank.com.au/corporategovernance
Financial
highlights
2024
at a glance
Our reporting suite
About this report
Our Annual Report includes information
on CBA’s strategic priorities, risk
management and corporate governance,
as well as our financial and non-financial
performance. Our reporting themes are
informed by our sustainability materiality
assessment detailed on pages 24 to 25.
We continually evolve our reporting
to align with changes in legislation,
best practice and feedback from
our stakeholders.
For important information on climate-related, non-IFRS
and forward-looking statements, see page 328.
$9,481m
Statutory Net profit
after tax (NPAT)
6%
$9,836m
Cash NPAT
2%
$27,174m
Operating income
Flat on FY23
1.99%
Net interest margin
8 basis points
12.3%
Capital ratio
CET1 (APRA, Level 2)
10 basis points
$4.65
Dividend per share,
fully franked
2
Learn more about how we create value on page 6.
Creating value for stakeholders
Communities
Investors
Our people
Customers
201
organisations supported
65.8
RepTrak reputation
score
830,000+
shareholders
154%
10-year Total
shareholder
return (TSR)
17.6m
customers
#1
Net Promoter Score®
(NPS) Consumer and
Institutional banking
53,000+
employees
84%
People engagement
score (May 2024)
Our broader impact bringing our purpose to life
120,000+
customers
bought homes
$39bn
lent to businesses
to help them grow
44.9%
women in Executive
Manager and above roles
37%
cultural representation
in leadership
$2m
in grants through
CommBank Foundation
$9.5bn
additional funding
towards our sustainability
funding target
13m
Australians benefit from
CBA returns through
superannuation
$150bn+
international funding
held, which benefits
Australian households
Our direct impact by distributing our income
$24bn
interest paid to savers,
$880bn+ safeguarded
in customer deposits
$800m+
invested to protect
against fraud, scams,
financial and cyber crime
$7.5bn
paid in salaries and
superannuation
$40m
invested in upskilling
our people with training
and development
$4.5bn
paid to suppliers and
third parties to enable
us to serve our customers
$5.3bn
total taxes paid
$8bn
paid in dividends
and share buy-backs
to shareholders
$14bn
interest paid to
domestic and offshore
debt investors
Financials are presented on a continuing operations basis, except the Common Equity Tier 1 (CET1) capital ratio which includes discontinued operations.
Cash NPAT, which is presented other than in accordance with relevant accounting standards, is management's preferred measure of the Group's financial
performance. It excludes non-cash items. Comparative information has been restated. All figures relate to the full year ended 30 June 2024 and comparisons
are to the year ended 30 June 2023. For data sources and definitions, see Glossary on pages 312–327.
3
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
OVERVIEW
Our people
and culture
Having highly engaged, capable
and accountable teams is essential
to delivering our strategy and positive
outcomes for our customers, our
people, communities and shareholders.
See pages 31–35 for more on our people and culture.
Our Code of Conduct guides our people to deliver on our
purpose and strategy, by setting expectations for how we act
and make decisions. The ’Should We?’ test helps our people
make the right decisions for our customers, shareholders and
other stakeholders.
We are guided by our Values in everything we do.
Our leadership principles help leaders understand what
is required to lead successfully to execute our strategy.
Obsess over
customers
Lead as an
owner
Be curious
and humble
Create exceptional
teams
Key considerations for risk this year:
Macroeconomic
uncertainty and cost
of living pressures
Escalating fraud,
scams and cybercrime
Environmental and
social expectations
Increasingly complex
geopolitical environment
Competition intensity
Capability and culture
Our purpose
We are guided by our purpose –
Building a brighter future for all.
Our purpose reflects our ambition, and
it inspires and connects us to the Bank’s
reason for being, conveying our hope
and optimism for the future.
Our strategy
Inspired by our purpose, we are focused on
building tomorrow’s bank today for our customers,
through our strategic priorities:
▶ Helping build Australia’s future economy
▶ Reimagining banking
▶ Simpler, better foundations
Our operating context
We regularly review our external
environment to better understand
and effectively respond to risks and
opportunities. This helps us test that
our strategy continues to deliver for
our customers, and provides sustainable
outcomes for shareholders and
other stakeholders.
See pages 70–79 for more on how we manage risk.
We are Australia’s largest bank, serving more than
17 million customers. We provide retail and commercial
banking services predominantly in Australia, and
in New Zealand through our subsidiary, ASB.
Who we are
4
Our businesses
Our products and services are provided
through our businesses, Retail
Banking Services, Business Banking,
Institutional Banking and Markets, and
our subsidiary ASB.
See pages 66–69 for more on the
performance of our businesses.
Leading franchise: We are
Australia’s leading bank
for both households and
businesses. This business
mix results in more stable
and lower cost of funding,
and better risk identification.
Strong balance sheet and risk
management: We continue to
grow our resilient balance sheet
and maintain conservative
capital, liquidity and funding
settings, as well as peer-leading
provision coverage.
Sustainable returns to
shareholders: CBA has
delivered a total shareholder
return of 154% over 10 years
to 30 June 2024, which is
above leading global banks
in developed economies and
domestic peers. We aim to
consistently deliver sector
leading return on equity and
sustainable, fully franked
dividends.
Retail Banking Services
(RBS): Provides simple and
convenient banking products
and services, to personal
and private bank customers
in Australia.
Business Banking (BB):
Serves the banking needs
of Australian business,
corporate and agribusiness
customers across a full
range of financial services.
Institutional Banking
& Markets (IB&M): Provides
domestic and global financial
and banking services to large
corporate, institutional and
government clients.
ASB: Provides a range
of banking and investment
products and services
to personal, business,
corporate and rural
customers in New Zealand.
Group cash NPAT 1 by business
$5,355m
RBS
$1,097m
IB&M
$1,194m
New Zealand (including ASB)
$3,774m
BB
We consider the impact of our
operations and business activities
on the climate.
See pages 26–29 for how these impacts
are measured.
Customers
Our people
Communities,
industry groups
and civil society
Investors
Government and
regulators
Suppliers
Our stakeholders
Understanding our stakeholders’
needs and expectations, allows us
to consider their different views
and deliver balanced stakeholder
outcomes. We aim to improve our
trust and reputation by putting
customer needs first and making
a broader contribution to
the community.
See pages 22–23 for more on our approach
to stakeholder engagement.
Why CBA?
We seek to build a brighter future for
customers, our people, communities
and the broader economy. To do
this consistently, we need to deliver
positive shareholder returns.
See pages 6–7 for more on how we create value
and pages 60–69 for financial performance.
1 Group Cash NPAT by business unit includes net loss after tax from the Group Corporate Centre, not shown in the business unit contribution.
5
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
OVERVIEW
FINANCIAL REPORT
DIRECTORS’ REPORT
ADDITIONAL INFORMATION
How we create value
Our value drivers
Highly engaged
and capable team
Engaged and accountable teams
executing the Bank’s strategy,
delivering better outcomes
for our customers, communities
and shareholders.
Strength of customer
relationships and franchise
Largest branch network
in Australia, combined with
leading digital experiences build
deeper customer relationships.
Technology leader,
history of innovation
Leadership position in digital banking
through continued investment
in digital infrastructure, data,
artificial intelligence and innovation.
Strong balance sheet
and risk management
Disciplined capital management,
balance sheet strength and robust
risk management practices create
flexibility to support customers and the
economy through all market conditions.
Commitment
to sustainability
Balancing stakeholder needs and
a focus on sustainable practices,
policies and decisions creates
long-term value for our stakeholders.
Creating enduring
customer relationships
Strong customer relationships
and frequency of engagement
CBA’s trusted brand attracts a leading share
of deposit customers, including young adults
and migrants, and its distinct propositions
result in a deeper customer engagement.
Superior customer experience
Our customer focus and disciplined
operational execution means we can
offer distinct customer solutions that
benefit them and reward their loyalty.
1
Better understanding of
customer needs and risk
Through deeper customer relationships
and technology, we can understand and
meet more of our customers’ needs,
as well as manage risk more effectively.
2
3
6
Providing superior
customer experiences
Helping our customers achieve their life goals
with personalised and differentiated customer
propositions, provided through our businesses.
By living our purpose, we aim to support our customers, communities
and the nation towards a more prosperous, sustainable and resilient
future, while delivering positive outcomes for our stakeholders.
Customers
We seek to understand our customers and
provide them with superior experiences,
while supporting them in a fair, timely
and transparent way. We aim to be a safe,
strong bank and always available.
See Supporting our customers on pages 36–41.
Our people
Our aim is for our people to be supported,
motivated, engaged, and feel valued and
respected – believing in our purpose and
their role in achieving it.
See Engaging our people and adapting our
culture on pages 31–35.
Communities
We aim to make positive contributions to
our communities in line with our purpose,
creating a brighter future for all.
See Strengthening our communities
on pages 42–43.
Environment
We provide retail and business funding to
support a coordinated, reliable, affordable
and inclusive transition.
See Environment on pages 26–29.
Shareholders
We seek to deliver the lowest volatility
of earnings that support a sustainable
dividend for our shareholders.
See Delivering for shareholders on page 61.
Value we aim to create
Everyday
Giving customers more control and
helping them save on everyday spending.
Home
Making it quick and easy for customers to finance
and run their home, bringing them greater value.
Invest
Making it simpler and easier for our customers
to invest across a range of investment options.
Business
Digitising transaction banking
and differentiating our merchant
proposition to better meet
customers’ needs.
7
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
The rising cost of living and interest rates
continue to have uneven impacts on
Australians. Given the current economic
conditions facing our customers and the
nation, and other operating conditions,
we took time to consider the relevance
of our strategy and balance sheet
settings – to enable us to lead in the
support we provide to our customers
and the broader economy.
Our response to COVID-19 highlighted
the importance of being there for
customers when they need us most.
We remain focused on supporting
our customers and providing financial
solutions to suit their needs.
We want standards of living to
continuously improve for Australians by
playing our role in helping the economy
grow. Through reimagined products
and services, and our multi-decade
investment in best digital experiences
and technology, we aim to help our
customers achieve their life goals and
deliver superior customer experiences.
Our continued focus on being a strong,
safe and resilient bank enables us
to be there through good times and
bad. We aim to do this consistently,
delivering sustainable earnings and
dividends for our shareholders.
Learn more about how the Board
oversees strategy on page 83.
Supporting our customers
We are fortunate to have one in three
Australians and one in four businesses
call CBA their main financial institution.
With that position rightfully comes high
customer and societal expectations to
provide a better banking experience, and
to support customers and the economy.
Our strategy is centred on building
long-lasting relationships with our
customers to become their trusted
financial partner. This often begins with
a transaction account and evolves over
time with their needs. We aim to help
our customers achieve their life goals,
from savings milestones, buying a home
or starting and growing a business.
This year, we helped more than 120,000
customers buy a home and lent $39 billion
to businesses to help them grow.
Across the country people are feeling
pressure from the higher cost of living
and we are here to help. We are
providing customers with more
options to help them manage cost
of living pressures. Around 3 million
customers are engaging with our
money management tools monthly.
We provided eligible homeowner
customers with personalised solutions
such as interest only and reduced
payment plans or deferrals, and have
made it easier to access financial
hardship for those who need it.
Sadly, fraud and scams continue
to impact too many Australians,
with $2.7 billion lost to scams in 2023.
We invested over $800 million to
help protect customers against fraud,
scams, financial and cyber crime.
This helped halve CBA customer scam
losses this year. As this issue affects
all Australians, we believe it is crucial
to continue to work with governments,
regulators, digital platforms,
telcos, banks and other industries
to develop a national approach
to reduce fraud and scams.
Climate change continues to be
top of mind. We remain committed
to supporting Australia’s transition
to a net zero economy by 2050,
by continuing to manage the risks
and opportunities of climate change,
supporting our customers and
calling for an inclusive transition.
Learn more about our climate approach
on pages 26–29.
Investing for the future
We continue to make considered
investments to modernise our
technology and improve resiliency,
as well as to enhance our services
and meet evolving regulatory
requirements. Our investments
support a safe, strong and resilient
bank, fit for future decades.
To offer customers a superior,
personalised and highly relevant
experience we also invest to support
innovation. Our digital strategy aims
to make banking experiences seamless.
Our investment over the last decade
into our Customer Engagement Engine
(CEE) has served us well and we
continue to build on these foundations.
Our continued investment into the
CommBank app allows 8.5 million
customers to bank digitally.
Our ambition is to safely harness
data and use technology,
including artificial intelligence,
to provide superior, intuitive, digital
services and improved customer
experience. Our people, supported
by technology, data and analytics
are then able to focus on better
understanding customer needs and
providing them with differentiated
banking experiences.
CBA has the largest branch network
in Australia and we are proud of
the role these branches play in all
the communities we serve. This
financial year, we committed to keep
all CBA-branded regional branches
open until at least the end of 2026.
We are working closely with regional
communities to understand the services
they value and how best to provide them.
Learn more about our strategic progress
on pages 10–19.
Our purpose, building a brighter future for all, embodies
our role in supporting our customers and economic growth.
Our customer-focused strategy and resilient balance sheet enables
us to be there for our customers and the nation when most needed.
Our commitment to contributing
to a more prosperous, sustainable
and resilient economy
8
CHAIR AND CEO’S MESSAGE
Supporting a prosperous
and resilient economy
A strong banking system is required
to support a strong economy. Financial
services are essential to people’s
everyday lives and support almost all
other activities in the economy. Banks can
stimulate economic growth by lending
to productive parts of the economy.
As Australia’s largest bank, we have
a responsibility to always have the
capacity to support the economy
in times of crisis, by maintaining
strong operational performance and
conservative balance sheet settings.
By delivering peer-leading growth
in organic capital, we are able to
fund new lending, invest for the
future and pay a sustainable dividend.
We seek to maintain balance sheet
resilience, and strong deposit funding,
liquidity, provisioning and capital
positions. While each decision may
have a current period cost, this approach
enables CBA to continue to support
our customers, deliver earnings
stability, lower through the cycle losses
and outperform during economic
downturns. Being positioned to support
a prosperous, sustainable and resilient
economy guides our decision making.
Delivering sustainable
performance
Our customer focus, combined with
consistent and disciplined strategic and
operational execution, has delivered
good outcomes for all stakeholders.
We have continued to profitably grow
business lending, home lending and
deposits, while managing our costs
in an inflationary environment. We
further strengthened our balance
sheet and are well positioned to
support our customers and deliver
sustainable returns for our 830,000
shareholders. Our dividend payout ratio
increased to 79%, benefitting more
than 13 million Australians who own
CBA shares directly or through their
superannuation holding. We declared
a final dividend of $2.50 per share, fully
franked, resulting in a full year dividend
of $4.65 per share, fully franked.
Learn more about our financial
performance on pages 60–69.
Outlook
The Australian economy remains
resilient with low unemployment,
continued private and public
investment and exports supporting
national income. Higher interest rates
are slowing the economy and gradually
moderating inflation. Australia remains
well positioned but downside risks
continue around productivity, housing
affordability, as well as ongoing global
uncertainty. We have the strength and
stability to support customers when
needed and play our part in stimulating
economic growth by lending to
productive parts of the economy.
Every day our people continue to work
hard to earn our customers' trust and
meet their expectations in a way that
is sustainable. Providing customers
with a full transaction banking offering
is at the centre of our strategy. To do
this, we need to provide the services
customers value most, as efficiently as
possible. We will continue to work with
key stakeholders to sustainably support
services in the national interest.
Effective governance, accountability
and culture are key to delivering our
purpose. As we look ahead, to deliver
sustainable returns for our shareholders
we aim to make the right choices,
aligned with our purpose. We aim to
continue investing in our business and
consistently deliver better outcomes
for our customers at a faster pace and
higher quality. Our customer-focused
strategy continues to be well aligned
to our purpose and operating context.
Thank you
On behalf of the Board and Executive
Leadership Team, we would like to
thank all our people for their hard
work and commitment, our customers
for trusting us with their banking
services – and to you, our shareholders,
for your ongoing support.
Paul O’Malley
Chair
Matt Comyn
Chief Executive Officer
9
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Delivering on our
strategic priorities
Our strategic priorities
Helping build Australia’s future economy
Supporting our customers and the nation to build
a brighter future, together.
Reimagining banking
Reimagining what it means to be a bank, and building
trusted relationships to create more value for our customers.
Simpler, better foundations
Keeping the Bank strong, safe and resilient, and making
it easier for our people to deliver value for customers.
10
Key achievements
More information
Leading bank in Australia, with 35.5% of Australians and 25.5%
of businesses naming CBA as their main financial institution.
Engaging over 3 million customers monthly with money
management tools to help them make financial decisions
and achieve their goals .
Maintaining the largest branch network in Australia and
committed to keep all CBA-branded regional branches
open until at least the end of 2026.
See pages 12–13
Tripled the number of CommBank app users over 10 years,
to 8.5 million users.
Over five million customers engaging in CommBank Yello,
our loyalty program launched this year.
Increased engagement with CommBank app, with the
average customer logging in 41 times per month.
See pages 14–16
for reimagined
products and services
See page 17 for global
best digital experiences
and technology
Maintained strong balance sheet settings, positioned for a wide
range of economic scenarios.
Completed the sale of our 99% shareholding in PT Bank
Commonwealth in Indonesia.
Identified over 60 generative AI use cases to simplify
operational processes and support our frontline
employees to better serve customers.
See pages 18–19
Our strategy of building tomorrow’s bank today is focused
on helping customers achieve a brighter future. We continue
to invest for the long term in our people, business and
technology, to offer customers a superior, personalised
and more rewarding experience.
FINANCIAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
ADDITIONAL INFORMATION
OVERVIEW
COMMONWEALTH BANK
2024 ANNUAL REPORT
11
Learn more about how we are supporting our customers and communities on pages 36–43.
mistaken and scam payments
prevented with NameCheck
$410m+
customers served
from 17.1m FY23
17.6m
Helping build Australia’s
future economy
Supporting our customers and the nation
to build a brighter future, together.
Leadership in supporting Australia
With many Australians still struggling with the higher cost of living,
we have an important role to support customers and the nation
when most needed.
Our money management tools make it easier for customers
to manage their finances. With increased personalisation, over 3 million
customers are engaging with these tools monthly. Benefits finder has
connected CBA customers with over $1.2 billion in grants, rebates and
concessions since inception. To support customers facing financial
hardship, we offer more options including home loan flexible payment
plans, interest only loans, repayment pauses and loan deferrals.
Safe and secure banking is critical for the security of our customers and
the nation. We are committed to working with governments, regulators,
banks and other industries to support a whole of ecosystem approach
to combat fraud and scams. This year we invested over $800 million
to protect customers against fraud, scams, financial and cyber crime.
CBA’s continued focus on balance sheet strength and our conservative
approach to managing capital and funding provides capacity to support
our customers and the nation, while still delivering sustainable returns
to shareholders.
12
DELIVERING ON OUR STRATEGIC PRIORITIES
Extending retail and business
banking leadership
Our focus remains on building deep customer relationships and engagement
to deliver superior customer experiences. This has helped us become Australia’s
leading bank for both households and businesses, with 35.5% of Australians and
25.5% of businesses naming CBA as their main financial institution. We continue
to provide our customers with the largest branch and ATM network in Australia
and have committed to keep all CBA-branded regional branches open until
at least the end of 2026.
For our retail customers, we are focused on making it easier and simpler to bank
with us. We regularly collect customer feedback to help us make every customer
interaction exceptional, through personalised service digitally, on the phone or in
branch. We continue to work on resolving poor customer experiences, improving
core processes and rewarding customers for their loyalty.
Supporting businesses to grow is key to improving national living standards.
Our relationship-led business banking strategy has resulted in our continued
growth. Business transaction accounts have grown 9% to 1.25 million accounts,
with over 850,000 being small businesses.
We seek to support our business customers’ cash flow with innovative
products and continue to expand our offerings to help them run and grow their
businesses. The Capital Growth Account, which provides short notice access
to interest-earning funds, has reached over $1.2 billion in deposits. We launched
an Australian first deposit product, the Flexi Business Investment account which
allows customers to withdraw up to 20% of their money before the end of term,
without interest adjustments or administration fees.
Contributing to national
fraud and scams resilience
Too many Australians have been
victims of fraud, scams and cyber
crime. We continue to invest,
innovate and contribute to a national
approach to combat these crimes.
CBA has introduced technology
solutions such as NameCheck,
CustomerCheck and CallerCheck.
Our NameCheck technology has
prevented more than $370 million
in mistaken internet payments through
NetBank and the app and $40 million
in scam losses in 2024. As part of a
national approach to combat fraud
and scams, we extended NameCheck
to other organisations, preventing
more than $12 million in mistaken
payments and potential scams so far.
We also implemented measures to
protect customers from losses linked
to cryptocurrency payment scams.
CBA is the first bank to integrate
and share information into a new
anti-scam intelligence loop. Our
fraud team helped co-design the
intel loop, adding another layer to
Australia’s defence. To combat scams
effectively we need coordinated
action across governments,
regulators, digital platforms,
telcos, banks and other industries.
Learn more about how we are helping
with fraud and scams on page 37.
Helping Australia transition to a better future
We are committed to helping Australia transition to a more prosperous,
sustainable and resilient future. We can play a positive role by bringing capital
into the economy and lending to companies in sectors such as agriculture,
manufacturing, transport, healthcare, retail and wholesale trade.
We are focused on supporting the growth of small businesses as major
contributors to our economy. Our Stream Working Capital solution fulfils the
growing demand for flexible collateral by helping businesses access funds tied
up in unpaid invoices to manage fluctuations in their cash flow. We are continuing
to support small business customers experiencing financial difficulty with flexible
repayment plans and other programs, through our business financial assistance
teams. Over 70% of small business loans now have access to faster lending
outcomes through product and customer eligibility improvements on BizExpress,
our simple origination platform.
We provide a range of products and services to help customers invest in proven
technologies to lower emissions or reduce environmental impacts. The majority
of our lending is to residential housing and small businesses. We are well
positioned to support retail and business customers with a range of products
and accessible solutions to help them take advantage of energy efficient
opportunities. This is not only important for Australia’s energy transition,
but can also assist in easing cost of living pressures for our customers.
As at 30 June 2024, we have provided $54.2 billion in cumulative funding
towards our 2030 Sustainability Funding Target of $70 billion.
Learn more about how we are supporting Australia’s transition to a net zero future on
pages 26–29.
Supporting businesses
to progress their net
zero ambitions
Transport is Australia’s third
largest source of carbon emissions.
Financing GoZero’s electric coaches
is one of the ways we are delivering
on our Sustainability Funding Target.
GoZero is leading the transition to
electric buses servicing schools. CBA
provides GoZero with access to an
$80 million asset finance facility to
in part replace existing diesel school
charter coach services with electric
buses for schools in Sydney.
13
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Reimagining banking
Personalising customer experiences
A core strength of CBA comes from our long-standing focus
to build strong customer relationships. Our ambition is to help
our customers achieve their goals, such as growing savings, buying
a house or starting a business. We continue to reimagine banking
to deliver more personalised experiences.
More of our customers continue to choose to bank with us digitally.
We now have 8.5 million CommBank app users, triple the number we
had 10 years ago. This year, $997 billion in digital transactions were
made through the CommBank app.
Central to our customer approach is our market-leading app, which
provides simplified and personalised customer experiences. Customers
can manage their personal and business accounts, access money
management tools, exclusive offers and invest with CommSec.
Through frequent customer engagement, we gain insights to create
even more relevant products and services, and deliver a superior
customer experience. We also gain a better understanding of our
customers and their needs.
Our long-term investment in technology enables our digital leadership.
We continue to invest in technology to set foundations for the next
decade. This allows us to innovate, provide relevant and differentiated
customer propositions and deepen customer relationships.
Reimagining what it means to be a bank, and building
trusted relationships to create more value for our customers.
CommBank app users 1
from 7.8m FY23
8.5m+
consumer mobile app NPS 1
#1
1 See Glossary on pages 312–327
for source information.
Bank of the Year
Digital Banking
15 years in a row 1
Best Digital Consumer
Bank (Major)
6 years in a row 1
Most Innovative
Major Consumer Bank
6 years in a row 1
14
DELIVERING ON OUR STRATEGIC PRIORITIES
Rewarding our customers′ loyalty
CommBank Yello, our loyalty program, rewards eligible customers with personalised benefits and offerings.
To help give our customers the most benefit from CommBank Yello, we use artificial intelligence (AI) to match
customers with the most relevant partner offers. The CommBank Yello program continues to evolve to provide
relevant benefits to our customers. This includes expanding the offers and cashbacks available in key categories
to meet consumer preferences. Since launch in November 2023, over 5 million customers have engaged with
CommBank Yello – making it one of Australia’s largest loyalty programs, unlocking value for both retail and
merchant customers. CommBank Yello will soon be available to business customers.
We aim to give our retail and business customers more value
from banking with us. With continued personalisation and
investment to differentiate our offering, we seek to exceed
our customers’ expectations.
Reimagined products and services
Key benefits
and offers
Since launch
Exclusive
cashbacks and offers
from partners
Eligible customers receive
exclusive cashback offers
and other benefits from
our partners – some of
Australia’s favourite brands.
Homeowner benefits
Customers with an active
eligible CommBank home
loan receive monthly
cashbacks on eligible
home insurance policies
and personalised property
trend reports.
Bonus CommBank
Awards points
Eligible customers can
receive bonus awards
points through CommBank
Yello offers when they
sign up to a new product
on their Smart Awards
credit card.
unique retail offers
made available to
CommBank Yello
customers
900+
customers have
engaged with
CommBank Yello
5m+
in value delivered
to customers through
cashbacks, discounts
and prize draws paid
to customers
$40m
Learn more at commbank.com.au/yello
15
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Helping customers achieve their goals
Customers continue to look for ways to save money, better manage their finances
and achieve their life goals. With the use of data and AI, we aim to improve tools
and digital features to make it easier for customers to save and make financial
decisions, as well as access exclusive deals.
We use customer insights to personalise our money management tools.
Bill Sense uses AI models to predict upcoming bills and engages over 1.4 million
customers each month. Money Plan, with 330,000 monthly users, brings all our
money management tools together to help customers understand and manage
their spending and saving. Cash Flow View can be used by small and medium
businesses to track categorised income and expenses. Our customers are using
Goal Tracker to achieve financial goals, making milestones like buying a home
or car, or travelling more attainable. Since Goal Tracker was introduced in 2018,
3.3 million goals have been set.
Benefits finder helps personal and business customers find and apply for
grants, rebates and concessions they may be entitled to. Customers can
also choose to get notified via the app to be reminded of benefits they may
be eligible for. Our Customer Engagement Engine (CEE) uses AI to help
customers connect with benefits most relevant to them.
As we develop and deploy new AI experiences and tools for our customers,
it is critical to do so in a way that builds trust and leads to positive customer
outcomes. Our behavioural science and digital teams undertake careful
research and testing to develop human-centred and evidence-based AI
programs. Our experts are working with global partners to understand what
works best for our customers and how we can support them to make the
best of these new technologies.
Reimagining customer experiences
We understand that our customers want banking to be simple and personal,
no matter which part of the Bank they are interacting with, or which life stage
they are at.
Buying a home is a moment that matters in the lives of many Australians.
They expect to receive personalised and timely service with appropriate pricing
from their bank. We aim to deliver a differentiated home buying experience.
We have streamlined and digitised processes, so that eligible home loan
applications can be completed easily and efficiently online by using pre-filled
information, digital ID verification and credit assessments, and automated
decision making. We are introducing automated income verification, which will
help to reduce application processing times. With these improvements, around
70% of proprietary applications are decisioned same day and customers
only wait three days on average for manual first decisions. Digital document
capabilities are used by 90% of our customers. Home loan customers also have
the option to self-serve digitally, including through Home Hub, or contact us
by phone or in branch.
Finding different ways
to create value
We seek to build partnerships that
can provide additional value to our
customers. Our strategic relationship
with More Telecom is helping our
customers save on their mobile and
broadband bills.
Our collaborations with Optus,
Vodafone and Telstra are helping
protect our customers against
fraud and scams, by sharing data
to block SMS, intercept scam calls
and transactions.
To enhance protection against
fraud and scams, our venture‑scaler,
x15ventures, is piloting a digital
protection tool named Truyu. This
tool, a first of its kind in Australia,
promptly notifies individuals
when their identity is being used,
or misused, by the majority of
merchants that run identity checks.
16
DELIVERING ON OUR STRATEGIC PRIORITIES
DELIVERING ON OUR STRATEGIC PRIORITIES
Global best digital experiences
and technology
We use data, AI, technology and world-class engineering
to personalise and improve our customers’ digital experience.
Delivering integrated digital experiences
For over a decade we have been pursuing a better personalised digital experience
for our customers. By building an enterprise data platform and utilising machine
learning and AI, we can harness more data and information to better understand
and serve our customers. Generative AI is helping improve customer engagement
outcomes, by reimagining how we use data and analytics.
We continue to enhance CEE, our AI-driven customer engagement engine.
CEE runs over 2,000 real-time machine learning models and processes over
157 billion data points, including from our CommBank app. This platform helps
us serve our customers with next best conversations across all channels of
banking. With next best conversations we can be more deliberate in connecting
with customers to proactively offer support, such as to home loan customers
showing early signs of financial difficulty. AI can be used to add value to our
customers and people in many ways – customers can use the CommBank app
to access personalised offers, and customer-facing teams can use generative
AI tools to help answer customer queries.
Our technology platforms use machine learning to detect suspicious and unusual
behaviour on our digital banking platforms and alerts customers to potential
scams. This ‘protect, detect and resolve’ approach is aimed at identifying
irregularities and scammers, to stop activities not authorised by the customer.
Our CommBank app is a trusted financial tool for many customers, providing
convenience, value and security to more than 8.5 million customers. Over the
past decade, customer engagement with the app has increased significantly
with the average customer logging in 41 times per month, up from around
15 times a month in 2014. Navigation links in the app are tailored to each
customer, increasing engagement and discoverability of relevant tools,
creating a more personalised digital experience.
Modernising our systems and digitising
end‑to‑end
We continuously focus on our core technology platforms to deliver better
customer outcomes. This includes simplifying and modernising our
technology estate, leveraging the cloud for faster responsiveness, and
investing in microservices to improve connectivity between software systems.
Investing in a modern technology estate and engineering practices
allows us to increase the velocity of releasing features and updates to our
customers, while minimising impact and downtime. We continue to invest
in the security and resilience of our technology and strive to provide services
that are reliable, safe, and available whenever and wherever our customers
need them.
We are seeing improvements in the velocity of our technology change and the
impact of change-related incidents is decreasing. We successfully completed
an enterprise release to our key banking systems with no customer impacts or
outage. During the release window, more than 770,000 customers were able
to interact with our digital channels and we supported 120,000 payments.
Previously, this would have involved being digitally unavailable to our customers
for up to five hours.
Building world‑class
engineering and
partnerships
We continue to grow our world‑class
engineering capability to build and
modernise our technology. We are
focused on creating exceptional
experiences for our engineers,
by investing in development and tools,
and placing them in the right places
in the organisation.
We hired over 1,100 engineers this
year and now have 5,185 engineers
who bring valuable technology skills
to CBA. We continue to invest in our
technology graduate program with 206
graduates joining this year, of these
34% were women. Our graduates will
help modernise our technology estate
and use technologies like AI to enhance
customer experience, while bringing
diverse talent into the Bank. CBA also
launched the ‘AI for All’ micro‑learning
series, which covers topics such as
Generative AI, Deep Learning and
Responsible AI. The series helps our
people use AI safely and responsibly.
We have over 15,000 module
completions this year.
In partnership with Microsoft, H2O.ai
and AWS, we continue to explore
generative AI use cases across the
organisation. This is an opportunity
to work together with leading global
technology partners, driving faster,
safer and more accurate outcomes,
that make it easier for our people
to get work done.
17
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Simpler, better
foundations
Keeping the Bank strong, safe and resilient, and making
it easier for our people to deliver value for customers.
Running a strong and safe bank
Strong and safe banks benefit our customers and the economy.
We manage our balance sheet and capital conservatively, with the
aim of being well positioned for a wide range of economic scenarios.
This allows us to provide support and stability to customers during
difficult times, while maintaining investment in our business and
sustainable dividend payments for our shareholders.
The Bank takes a long-term disciplined approach to balance sheet and
capital management. We carefully consider future impacts to funding,
credit and liquidity needs. It is important that we lend responsibly,
as well as maintain adequate provisions to protect shareholders from
expected losses. Our balance sheet settings remain peer-leading,
with a 77% deposit funding ratio and a conservative mix of short-term
to long-term wholesale funding.
Maintaining stable capital, balance sheet and business mix positions
is central to help us invest and grow, to meet customers’ expectations
of a bank now and into the future. We make considered technology
and operational investments to keep the Bank strong and safe,
simplify our operations and deliver superior digital experiences.
investment spend in
strategic priorities
deposit funding ratio
$2bn
77%
18
DELIVERING ON OUR STRATEGIC PRIORITIES
Driving operational excellence
One in three Australians and one in four Australian
businesses trust us with their banking. We work every day
to deepen our relationship with our customers, by providing
superior experiences and meeting their evolving needs and
expectations. We are focused on improving the processes
which have a key impact on our customers and making
it easier for our people to serve them. It is important that
we keep learning and continuously improving to deliver better
customer outcomes. This year we invested in improving core
operations, and preventing and reducing customer complaints.
Driving process digitisation and removing complexity provides
consistency, productivity and simplicity for our customers
and people. These efforts led to a 39% decrease in core
operations complaints compared to the prior year.
We have identified over 60 generative AI use cases to simplify
operational processes and support our frontline employees
to better serve customers. Our CommBank Gen.ai Studio
brings Large Language Models (LLMs), both proprietary and
open source, into a controlled environment. This allows us
to harness data from over 4,500 documents to help frontline
teams answer customer queries accurately and quickly. We
also introduced ChatIT, our generative AI-enabled IT support
chatbot to help our people find fast solutions to technology
issues. With an average response time of 14 seconds, over
10,000 employees have interacted with ChatIT and positively
rated the experience, allowing them to focus on more
meaningful work sooner and easier.
We continue to build resilience in our systems, to deliver the
consistent and reliable banking service our customers expect.
Delivering uninterrupted access to retail online banking is
a priority, for customers to make transfers, initiate payments
and view accurate account information when needed. Our
service availability for access to online banking platforms
averaged 99.83% 1 for FY24, as per our RBA disclosures.
We recognise the significant impact of any service disruption
on our customers. In the event of outages, we prioritise quick
remediation and perform technical post-mortems to identify
root causes. This information helps us continuously improve
to meet customer needs.
Becoming a simpler bank
We continue to focus on our core banking businesses
in Australia and New Zealand. We completed the sale
of our 99% shareholding in PT Bank Commonwealth
in Indonesia in May 2024.
With more customers preferring digital and simpler
banking, we are transitioning Bankwest to a digital bank.
For customers in Western Australia who prefer to bank
in person, we will still provide services by converting
15 Bankwest branches to CBA-branded branches,
which will add to our existing 51 branches in the state.
Learn more about our offerings and support for regional
communities on page 37.
Investing in risk management
Effective risk management requires our people to understand different perspectives, use appropriate judgment to mitigate
risk, and deliver better outcomes for customers and shareholders. We continue to maintain the sound risk culture embedded
through the Remedial Action Plan in response to the Australian Prudential Regulation Authority (APRA) Prudential Inquiry.
Learnings from our past are shared with our people, creating a corporate memory to avoid similar mistakes in the future.
To improve our risk capability and control operations, we are using technology to deliver more consistent and secure experiences,
and ultimately better outcomes for our customers. Through our controls assurance automation program, we have automated
the testing of over 4,600 controls throughout our operations. This provides improved risk data quality and better understanding
of our controls performance.
Cyber criminals may target the Bank to disrupt operations and access valuable data, including customers’ personal information.
The Bank invests in cyber protection for our systems and prevention capabilities in response to growing threats to our
systems and to help better protect our customer information. We have also increased protection through measures such
as authentication on more of our systems. The Bank also remains vigilant with respect to monitoring systems, services and
activities to help with timely detection and response to any potential issues, including those that may originate from third parties.
Learn more about our approach to risk management on pages 70–79.
1 In addition, our service availability for ‘make/receive account transfers – fast payments’ and ‘make/receive account transfers – next business day’ measures
were 100% in FY24 under the RBA methodology. See Glossary on pages 312–327 for source information.
19
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Our commitment
to sustainability
Environmental
Our approach is informed by our
understanding of how environmental
issues could impact our business and
how our business activities can impact
the environment.
Social
We seek to create a brighter future for
all through the support we give to our
people, customers and communities.
Governance
We aim to manage our business
responsibly and transparently,
upholding a high standard of
governance to meet our obligations.
20
Our purpose of building a brighter future for all challenges us
to consider how our business activities impact the environment,
people and the broader economy. We recognise that our
strategy, risk management and operations need to consider
a broad range of sustainability issues.
Key activities in 2024
More information
Completed a detailed Group Climate Risk Materiality Assessment
to measure the climate impacts of two scenarios on each of the Bank’s
material risk types over the short, medium and long term.
Set six new sector-level financed emissions targets covering our
transport and Australian commercial property sectors. We now have
targets that account for 67% of our 2020 financed emissions.
We have continued to reduce our Scope 1 and 2 operational emissions
target, with a 65% reduction compared to 2020.
See pages 26–29
Positive employee engagement of 84% in our most recent survey.
Negotiated our Enterprise Agreement with more than 90% support
from our people .
Maintained our Consumer and Institutional NPS leadership as the
#1 ranked major bank.
Released our new Accessibility and Inclusion Strategy.
See pages 31–35
for our people
See pages 36–41
for customers
See pages 42–43
for communities
Launched the Responsible AI toolkit to help our people safely
and fairly embed AI models in our operations.
Jointly ranked #1 amongst global banks for leadership in Responsible AI,
in the Evident AI Index.
Developed our Modern Slavery Strategy which aims to further
enhance our due diligence, grievance and response and any
associated remediation, and reporting.
Reached our supplier diversity spend target, by spending
$22.7 million with First Nations suppliers across the business.
See pages 44–47
21
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Our approach to sustainability
Engaging with our stakeholders
Engaging meaningfully with our stakeholders helps us understand their needs
and concerns, allowing us to respond in a way that considers their different views.
Proactive engagement with our diverse stakeholders to
seek their different perspectives provides valuable insight
for CBA’s decision making. We aim to engage with and
listen to key stakeholders who can significantly impact or be
impacted by our business activities. Our Code of Conduct,
which incorporates our Values, guides how we interact with
our stakeholders.
By consistently improving our understanding of our
customers' and stakeholders' expectations, we are better
equipped to address their needs and concerns. Effective
engagement with our stakeholders allows us to build
relationships, increase community involvement and gain
valuable insights into their views. We understand the
importance of balancing different stakeholder needs
to create long-term value for our stakeholders. Stakeholder
needs and concerns are shared with relevant group forums
or committees for consideration. Stakeholder feedback helps
us identify key topics for disclosure and evaluate risks and
opportunities for further consideration.
Stakeholder engagement and feedback informs many
of our products and services, including the development
of our customer loyalty program, CommBank Yello.
We have also used feedback to improve and digitise
the home–buying experience.
Stakeholder channels such as the CBA Community Council,
Indigenous Advisory Council and Modern Slavery Advisory
Council provide important connection points with relevant
community groups. This year our council members have
provided input on payment rules, our abuse in transaction
description model, Indigenous customer support programs
and our new Modern Slavery Strategy, with insights shared
internally for consideration in operations.
Evolving community expectations and sustainability
reporting requirements ask for a more robust understanding
of our stakeholders’ needs. Our stakeholder engagement
approach will continue to develop. We aim to improve the
sharing of stakeholder insights across the Bank to inform
our operational and strategic priorities, and development
of products and services.
Engaging with stakeholders is fundamental for our
materiality assessments. It helps us identify key stakeholder
topics and how stakeholders perceive CBA’s impact on
these topics. Transparent reporting on these topics enables
stakeholders to understand how we are responding to their
needs and concerns.
Learn more about how the Board engages with stakeholders
on page 85.
We continue to evolve and embed sustainability
into our strategy and risk management
practices, as well as updating policies, systems
and processes to align to our sustainability
priorities. International Sustainability Standards
Board (ISSB) standards present an opportunity
to further strengthen our existing sustainability
reporting and our approach to managing
material sustainability-related issues. In time,
this will provide our stakeholders with more
transparent, consistent and comparable
sustainability-related information. This year
we reviewed our stakeholder engagement
approach and enhanced our materiality
process. This allows us to obtain valuable
stakeholder insights and to identify material
sustainability-related topics to include in our
reporting and decision making.
See our Stakeholder Engagement Approach at
commbank.com.au/policies
22
OUR COMMITMENT TO SUSTAINABILITY
Our stakeholders
Government and
Regulators
How we engage and collaborate
We engage with government
agencies, politicians and
regulators in accordance with our
group frameworks. This allows
us to exchange views on a range
of economic, financial industry
and social issues that impact our
customers, communities and activities.
Stakeholder priorities
• Banking and payments
• Climate change, nature
and biodiversity
• Cost of living pressures
• Corporate governance
• Customer support
• Cyber security and
operational resilience
• Financial performance
• Regulation
• Reputation and social license
Customers
17.6 million customers
How we engage and collaborate
We regularly connect with customers
to understand their needs and
obtain feedback. We engage through
structured channels including
in branches, contact centres,
customer satisfaction surveys,
complaints and feedback, focus
groups and customer visits.
Stakeholder priorities
• Cost of living pressures
• Customer support and experience
• Financial inclusion and accessibility
• Fraud and scams
• Housing affordability
• Renewable energy and
sustainable products
• Vulnerable customers
Community,
industry groups
and civil society
How we engage and collaborate
We engage with key representatives
through community visits and
regular Community Council
meetings. We also regularly meet
with and support industry body
associations to gather and share
views on key issues.
Stakeholder priorities
• Accessibility
• Climate change, nature and
biodiversity
• Cost of living pressures
• Community impacts
• Customer support
• Financial wellbeing and abuse
• Regulation
• Vulnerable customers
Investors
830,000+ shareholders
How we engage and collaborate
We engage so that investors have
the information needed to make
investment decisions. In addition
to our financial disclosures and
other reporting, we connect through
Annual General Meetings, investor
and analyst meetings, briefings and
shareholder correspondence.
Stakeholder priorities
• Climate change, nature
and biodiversity
• Corporate governance and
executive remuneration
• Cyber security and
operational resilience
• Financial performance
• Modern slavery and human rights
• Operational performance and
strategic execution
• Reputation and social license
Our people
53,000+ employees
How we engage and collaborate
We regularly engage with our people
to understand how they are feeling
about work and their wellbeing.
This also helps us understand their
level of engagement. We conduct
surveys and engage through
employee forums, town halls and
employee-led networks.
Stakeholder priorities
• Artificial intelligence
• Banking and payments
• Customer experience
• Diversity and inclusion
• Gender equality and pay
• Organisational behaviours
• Risk management
Suppliers
3,900+ suppliers
How we engage and collaborate
We engage and collaborate with
suppliers to deliver on strategic
priorities that meet the needs
of our stakeholders. Our engagement
is informed by supplier risk assessments
that prioritise mitigation of the
risks that are most material for our
customers and business.
Stakeholder priorities
• Climate change, nature and
biodiversity
• Cyber security and
operational resilience
• Inflation
• Modern slavery and human rights
• Privacy and data security
• Risk management
• Supplier diversity
• Supply chains and supplier risk
23
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Progressing our materiality
assessment
Understanding this year’s material themes
Our 2024 sustainability materiality assessment showed
strong consistency with the material topics and themes
disclosed in our 2023 Annual Report. Climate change
and climate transition continued to be important for all
stakeholders, however our stakeholders acknowledged the
limited impact that CBA can have on the issue in isolation.
Cyber and cyber security, digital and digitisation, customer
experience, and banking and payments were the highest
rated topics in 2024. Material topics that increased
in importance included cost of living, artificial intelligence
and cyber security.
Considering the financial impact on CBA, the process also
introduced several new material topics such as regulation,
economic issues, and banking and payments. As a result,
a new material theme was added this year – banking
strategy, operations and operating context – to reflect
the important impact these topics have on CBA and
our stakeholders.
Our material themes are closely aligned to CBA’s strategic
priorities and material risks.
Our material themes are mapped to the material risks
on pages 76–79.
Our sustainability materiality assessment considers CBA’s
operating context and involves engaging key stakeholders
that can impact or be impacted by CBA’s activities. Based
on stakeholders’ views, shortlisted topics are prioritised
by internal subject matter experts who rate the material
topics' impact on the Australian economy, environment and
people; CBA’s ability to impact the material topics; as well
as the potential impact on CBA’s financial performance.
Our 2024 materiality assessment builds on the assessment
performed in 2023. This year we updated our approach
to consider the potential financial impact a topic may have
on CBA or our ability to create value. We amended our
prioritisation matrix used to rate material topics, resulting
in a more informed rating. We also engaged directly with
investor representatives to understand key topics for
investors. The results of our materiality assessment were
shared with the Board.
Our materiality assessment is informed by global frameworks
including the Global Reporting Initiative. We aim to mature
our process to determine the material issues to disclose
under the requirements of the ISSB standards.
Our materiality process
1
Research and
engagement to
develop topic list
Reviewing our operating
context, public
documents and peer
reporting to identify
changes and initial topics.
Interviewing internal
representatives for key
stakeholders. This is
supplemented with
further research to
compile a longlist of
material topics.
Topic analysis,
prioritisation
and validation
Analysing material
topics for frequency
and importance and
developing a shortlist.
This list is prioritised
by internal subject
matter experts and
rated to assess CBA’s
potential impact on
the topic and its
potential financial
impact on CBA.
2
Topic validation
and insight
sharing
Prioritised topics
are validated by senior
leader reviews and
grouped into
material themes.
Materiality assessment
overview, results and
insights are shared
across the Bank and
with the Board.
3
Disclosure
and reporting
Our annual reporting
is guided by our
material themes,
helping us to address
the most important
stakeholder topics.
4
24
OUR COMMITMENT TO SUSTAINABILITY
Material themes
Material themes
Related topics
Our response
Customer support,
experience and
community impact
• Rising cost of living
• Fraud and scams
• Fair treatment of customers
• Vulnerable customers
• Customer experience
• Customer complaint process
• Accessible and inclusive
banking, including
financial literacy, wellbeing
and inclusion, and access
to banking
See pages 10–19
and 36–47
Engaged and
supported workforce
• Employee wellbeing
and mental health
• Organisational behaviour
• Culture and recognition
• Employee development
• Diversity, equity and inclusion,
including women in leadership
See pages 10–19
and 31–35
Governance, culture
and accountability
• Corporate Governance
• Ethical conduct, business
ethics and corporate
behaviour
• Reputation and
social license
• Modern slavery
• Remuneration policies
• Accountability
See pages 10–19,
44–47 and 80–97
Cyber security, privacy
and data management
• Cyber security
• Privacy
• Data management
See pages 10–19
and 46
Digitisation, innovation and
emerging technology
• Digitisation
• Digital innovation
• Emerging technologies
• Artificial intelligence
See pages 10–19
and 46
Climate transition
and nature
• Climate change and
inclusive transition
• Energy and
renewable energy
• Decarbonisation
• Natural disasters
• Nature and biodiversity
See pages 10–19
and 26–29
Banking strategy,
operations and
operating context
• Regulation and
banking regulation
• Risk management
• Banking and payments
• Sustainable products and
services
• Operational resilience and
simplification of processes
• Business operations
and strategic execution
• Macroeconomic issues
• Competition
See pages 10–19
and 70–79
25
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Supporting our customers with access to banking
services is highly dependent on our people and technology,
meaning the direct impact of our operations on the
environment is limited. Instead, we see our exposure to
environmental risks and opportunities as more significantly
concentrated in our lending to customers across a
range of sectors. We recognise stakeholders expect us
to consider the impact of our lending activities on the
environment and we continue to take steps to reduce
our operational emissions, and direct water and waste
usage. Our Environmental and Social (E&S) Framework
guides our approach to reducing our direct and indirect
environmental impact and details our commitments.
Two years ago, we outlined our transition roadmap for
progressively setting sector-level financed emissions
targets in line with pathways that aim to limit global
warming to 1.5°C. Setting and tracking progress
against sector-level financed emissions targets
helps us to contribute to the global goals of the
Paris Agreement.
For definitions of key words and phrases in this section,
such as financed emissions, see the Glossary on pages 312–327.
Environmental
Our approach is informed
by our understanding of how
environmental issues could
impact our business and how
our business activities could
impact the environment.
26
OUR COMMITMENT TO SUSTAINABILITY
Governance
Effective governance enables the Board to oversee the Bank’s management
of climate-related risks and opportunities. The Board’s responsibilities include
considering the material environmental and social impacts of the Bank’s
activities. The Board monitors the environmental and social work program,
which includes the development and delivery of CBA’s climate-related targets.
Once the Board has endorsed the Group strategy, the CEO is accountable
for executing, prioritising and allocating resources to deliver the strategy.
Oversight of climate-related opportunities is primarily a management
responsibility with individual opportunities identified at the business unit level.
Where appropriate, climate-related opportunities may be escalated to the
appropriate management committee or the Board. Governance committees
within the Bank support the Board’s oversight and Executive Leadership Team’s
management of climate-related risks and opportunities. These processes are
supported by the application of a range of internal policies, standards and
procedures that govern the way we deliver our products and services.
For more information, see the Governance section of our 2024 Climate Report.
Climate strategy
We remain committed to supporting Australia’s transition to a net zero
economy by 2050, by continuing to manage the risks and opportunities
of climate change, supporting our customers and calling for an inclusive
transition. This year’s Climate Report provides a further update on our
progress against our roadmap for progressively setting sector-level targets
on financed emissions, and operational emissions targets.
To help direct our lending and financing activities, we apply our E&S
Framework, credit policies, set sector-level financed emissions targets, and
track progress towards our Sustainability Funding Target. For the past three
years, we have been working to progressively set interim 2030 sector-level
financed emissions targets. The objective of setting and tracking against these
2030 targets is to help us support Australia’s transition to net zero by 2050
and meet our NZBA commitment. We are working towards these targets by
taking steps that can help our customers reduce their emissions, re-balancing
our portfolio towards less emissions-intensive customers and reducing our
exposures to certain sectors. Our approach to setting and achieving our targets
may evolve in the future as new data and methodologies emerge.
Our focus is on providing banking services, predominantly lending, to retail and
business banking customers in Australia and New Zealand. A smaller portion
of our lending is for large institutional banking customers. Decarbonising
Australia’s electricity grid remains the priority step needed for Australia to
achieve net zero emissions by 2050 and is also a key factor in achieving the
Bank’s emissions targets.
Climate change is a collective challenge and we seek to engage with
stakeholders to hear and understand their diverse views on this important
issue. We aim to work closely with our stakeholders to find ways we can
collectively support Australia’s transition to a more prosperous, resilient
and lower carbon future.
For more information, see the Strategy section of our 2024 Climate Report.
Our collective
climate‑related
challenge
Climate change is a collective global
challenge requiring coordinated action
to limit global warming to 1.5°C.
We acknowledge some of our
customers, communities and regions
will face greater social transition
impacts and climate risks than others.
Managing the trade‑offs and tensions
between different stakeholder groups
is crucial for Australia’s net zero
transition, and policymakers and
businesses should work collaboratively
with regional and rural communities
to ensure the success of the energy
transition. Community participation
and stakeholder engagement is critical
and it is important stakeholders
are engaged early, consistently
and respectfully. We would welcome
continued coordination and
an agreed plan from Government
to ensure Australia remains on track
to achieve its targets.
We are supportive of careful planning
that integrates renewable energy
generation into Australia’s electricity
grid while maintaining grid reliability
and affordability. We believe the
Australian Energy Market Operator
(AEMO) is well placed to develop
a plan that effectively balances energy
reliability and affordability with the
nation’s emissions reduction priorities.
As Australia’s largest bank, we are
well positioned to support retail and
business customers with the purchase
of commercially proven technology
such as rooftop solar, batteries, and
electric vehicles, where it is affordable
for them. Our hope is to also see
consumers benefit from lower
energy costs as a result of energy
efficiency upgrades to their homes.
The costs of the transition need
to be appropriately shared to enable all
Australians to participate. Coordinated
and targeted policy support is needed
to deliver benefits to all consumers.
Our approach to managing
climate change
27
COMMONWEALTH BANK
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ADDITIONAL INFORMATION
OVERVIEW
Metrics and targets
We have been progressively setting operational and sector-level financed emissions targets in line with pathways to net zero
by 2050. The Board approved six new sector-level targets covering our transport and Australian commercial property sectors.
We have now set targets that account for 67% of our 2020 financed emissions. We have decided to defer setting targets for
the Australian agricultural sector at this time. To help us achieve our financed emissions targets and provide transparency to
our stakeholders, we measure and report our financed emissions aligned to the Partnership for Carbon Accounting Financials
(PCAF) Standard.
For information on the scope of our sector‑level financed emissions targets, see How to read this report on page 3 of our 2024 Climate Report.
Risk management
Climate-related risks can have different impacts on our customers, people,
communities and the Bank. Our risk approach helps us to better understand
and manage these impacts.
Our Group Risk Management Framework outlines how we identify, assess and manage risk, including E&S risk. E&S risk
includes climate change and nature-related impacts and represents drivers of material strategic, financial and non-financial
risks to the Bank. The Board approved risk appetite informs the boundaries of risk taking to achieve the Bank’s strategic
priorities. We recognise the interconnection between nature and climate issues, and the need for Australia to have coordinated
and collective action to maintain, enhance and restore nature and biodiversity. We continue to monitor developments under
Australia’s Nature Positive Plan, as well as the Australian Government’s commitments in relation to the Kunming-Montreal
Global Biodiversity Framework.
Our approach includes using tools and techniques to help us identify and assess the potential physical and transition risks
from climate change. We have continued to mature our environmental risk management approach in line with evolving
industry practices. This year, we have:
21.8
Financed emissions
MtCO2-e
$54.2bn
Cumulative funding towards
CBA's SFT since June 2020
Completed a Group Climate
Risk Materiality Assessment
to enhance our understanding
of how climate-related risks
could impact each of the Bank’s
material risk types over the short,
medium and long term.
Developed an ESG credit
standard to set expectations for
our bankers on how ESG risks
are to be consistently considered in
the credit risk assessment process
when making lending decisions and
through annual review processes.
Developed a framework and
criteria to assess alignment
of client transition plans
with well below 2°C, which
is the minimum goal of the
Paris Agreement.
For more information, see the Risk section of our 2024 Climate Report.
Financed emissions
Our financed emissions calculations cover 95% of our in-scope drawn lending
exposure. We estimate our 2023 absolute financed emissions of our in-scope
lending portfolio at 21.8 MtCO2-e, broadly stable as compared to the restated
2022 absolute financed emissions estimate, representing a modest 0.2 MtCO2-e
or 1% reduction. Financed emissions are lagged due to customer emissions
reporting cadences.
Sustainability Funding Target
Our Sustainability Funding Target (SFT) of $70 billion in cumulative funding
by 2030 helps us as we seek to support growth in industries, asset types and
activities that can have a positive impact on our economy and environment.
As at 30 June 2024, we have provided $54.2 billion in cumulative funding
towards our SFT.
ASB separately tracks and measures the funding they provide towards their SFT.
ASB’s SFT of NZ $6.5 billion in cumulative committed lending by 2030, against
a 2022 baseline, seeks to support the climate transition of the New Zealand
economy. In 2024, ASB provided a cumulative NZ $1.3 billion in funding against
their target.
For more information, see the Metrics and targets section of our 2024 Climate Report.
28
OUR COMMITMENT TO SUSTAINABILITY
Managing our operational
environmental impacts
Reducing our operational impact
Our focus on monitoring and reducing our operational emissions remains a
priority and we continue to undertake a range of initiatives, such as electrifying
the Group's fleet by 2030. We have continued to reduce our Scope 1 and 2
operational emissions target, with a 65% reduction compared to 2020. As a last
step, we offset residual emissions based on our currently reported boundary,
which may evolve over time.
This year we updated our Scope 3 operational emissions target to a 32.7% reduction
in absolute emissions by 2030, against our 2020 baseline. This target is aligned with
limiting global warming to 1.5°C for all Scope 3 operational emissions categories
included within our target, with the exception of air travel. This category remains at
a well below 2°C trajectory due to limited availability of sustainable aviation fuel
and zero emissions technologies. As at 30 June 2024, our Scope 3 operational
emissions are tracking marginally under the updated target trajectory, with
reductions supported primarily through freight- and waste-related initiatives.
Emissions within a number of Scope 3 operational emissions categories included
in our target have reduced, however we continue to see operational emissions
normalising following COVID-19. Our air travel emissions have increased primarily
due to greater demand for air travel, lack of alternative and reasonably fast
transport and emissions factor changes that came into effect in 2023. Our focus
now, is to expand our assessment of Scope 3 operational emissions in line with
the Greenhouse Gas Protocol Scope 3 categories and engage with key suppliers
to inform the assessment of our supply chain emissions.
We are also aiming to identify options to redesign our branches and workplaces
to be more resource efficient. This year we worked with an environmental
consultant to undertake a review of the embodied carbon in our standard retail
branch design to understand where and how we can further reduce emissions.
Leveraging insights from this review can help us to redesign elements of our
future branches, find lower carbon alternative materials and minimise the impact
of emissions-intensive products.
For more information, see the Metrics and targets section of our 2024 Climate Report.
Partnering for sustainable sourcing
Our internal food and beverage team consider sustainability in their
operations, connecting with local farmers and producers to create
unique dishes that contain locally sourced or sustainably farmed
ingredients. One of our partnerships supporting this focus is Bush
to Bowl, a First Nations owned social enterprise. Bush to Bowl
specialise in native and fresh produce, foraging and growing native
plants themselves to provide our food and beverage teams with
access to premium-quality products sourced sustainably. This year
Bush to Bowl supplied CBA with 585kg of wild harvested produce,
foraged locally from Garigal, Awabakal, Darkinjung and Gayemaygal
Country. The social enterprise aims to create culturally safe spaces
for First Nations peoples to work, share knowledge and connect,
while developing the economic position of communities in the
Bushfood industry.
1 For more information on progress against our operational emissions reduction targets, see page 75 of the 2024 Climate Report. For a reconciliation of our
Scope 1, 2 and 3 operational emissions and those within our reduction targets, see page 113 of our 2024 Climate Report.
Scope 1 and 2 operational emissions 1
Performance against target (tCO2-e)
Scope 3 operational emissions 1
Performance against target (tCO2-e)
FY20
FY21
FY22
FY23
FY24
34,288
12,709
12,386
23,177
29,640
14%
FY20
FY21
FY22
FY23
FY24
19,282
10,071
6,082
6,742
6,972
65%
29
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
We seek to create a brighter
future for all, through the support
we give to our people, customers
and communities.
Our people
Employees that are supported and empowered by our
values are more engaged, provide superior customer
experiences and help deliver our strategy.
See pages 31–35
Customers
We are listening to our customers to improve their
experience with us, and supporting them in all the
ways we can.
See pages 36–41
Communities
We are committed to supporting our communities as
we seek to build a brighter future for all.
See pages 42–43
Social
30
OUR COMMITMENT TO SUSTAINABILITY
A culture focused on positive
customer outcomes
Our aspiration is to have a culture
where our customers are at the centre
of everything we do, and we build
values, mindsets and behaviours
to support this. Our Code of Conduct
connects our values, the ‘Should We?’
test and key policies to our purpose,
guiding our people on how to act
and make decisions. Collectively,
our culture empowers our people to
make decisions that deliver the right
outcomes for our customers and
communities, as well as our business.
This year we made good progress on
improving our people’s understanding
of what it means to obsess over
customers. We continue to embed
our leadership principles to help
support leaders to create conditions
for teams to thrive and deliver
ambitious customer goals. We created
the ‘Leading Tomorrow’ experience
to support our people in successfully
leading to deliver our strategy. At
30 June 2024, 472 of our most senior
leaders had completed the training,
developing new skills, practices and
mindsets to help achieve our customer
ambition. We are now in the process
of cascading the program to our
extended leadership team focusing
on creating exceptional teams.
We encourage constructive challenge,
exercising good judgement and
taking risks we understand and can
manage. New ways of working and
organisation-wide quarterly planning
and prioritisation are helping us
deliver the highest impact outcomes
for customers, sooner and safer.
We want our culture to foster
reflection and learning, including
from progress made under CBA’s
Prudential Inquiry Remedial Action
Plan. This year we launched our
corporate memory learning journey
for new starters to share lessons our
organisation has learnt and remind
us what happens when we fail
to understand the impact our actions
have on customers.
The positive impact of investing
in our culture is reflected in the views
of our people. Our employee surveys
indicate that feeling respected and
taking time to listen to each other
remain strengths in our workplace.
Our people also continue to feel
supported through difficult times
at work. Maintaining an engaged
and supported workforce is critical
for us to deliver on our purpose and
strategy, and continuously adapt to
deliver superior customer outcomes.
Evaluating our culture
We continue to evaluate our culture to ensure we are aligning with our aspirational mindsets and behaviours. In addition
to formal culture reviews, such as the Board risk culture assessment, we also monitor the impact of culture change
initiatives through employee surveys, strategic metrics and focus group insights, as well as audit and whistleblower
reports. Collectively, these assessments help us understand where there are opportunities to improve our culture,
better manage our risks across the Bank and identify focus areas for individual teams.
Meaningful recognition
CBA's annual excellence awards
celebrate people living our values and
solving our customers’ unmet needs.
One of this year’s award winners,
Joseph Smith, challenged the status
quo to streamline the home loan
process for applications that are not
yet eligible for digital mortgages.
He focused on reducing the amount
of physical documentation needed
to be stored and handled by the Bank,
creating a simpler and safer approach
to digital documentation. Joseph’s
perseverance to make this change has
enhanced the home loan customer
experience while also creating
efficiencies for our business.
Employees that are supported and empowered by our
values are more engaged, provide superior customer
experiences and help deliver our strategy.
Engaging our people
and adapting our culture
31
COMMONWEALTH BANK
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OVERVIEW
Providing a safe and supportive workplace
Evolving our approach to
mental health and wellbeing
We are committed to creating a positive and supportive environment
that helps our people be their best. We take an holistic approach,
considering how we can help support all aspects of health and wellbeing
through tools, learning resources and assistance for our people. We have
also implemented a range of systems that help us proactively address
psychological risk and promote psychological health and safety.
An important aspect of our wellbeing approach is the management
of psychosocial hazards. How work is designed, organised and
managed can impact the psychological health and safety of our
people. Building on our existing management of traditional safety risks,
we have enhanced our approach to managing psychosocial hazards
through a dedicated framework, targeted assessments and embedded
this within existing safety systems to record and test how we manage
these hazards.
Education at all levels of the organisation is also important to help our
people understand the individual actions they can take to identify and
manage psychosocial hazards. Training and capability programs are
available to our leaders, tailored to their specific responsibilities to help
them navigate complex psychological health scenarios and understand
the work-related factors they can influence and control to improve our
people’s experience of work. This investment in leader capabilities and
systems that support early intervention are proven to reduce risk and
improve individual health outcomes.
Fostering a safe and
inclusive workplace
An inclusive environment where health, safety and wellbeing is promoted
helps our people reach their full potential. It also reflects the right of all
our people to work in an environment that is free from unlawful workplace
conduct, such as discrimination, harassment, sexual or sex-based
harassment, bullying and victimisation.
We have always taken our obligation to keep our people safe seriously,
and changes to enhance the positive duty for organisations are aligned
with work we have had underway for some time. A range of key programs
and processes help us maintain a safe, respectful and inclusive workplace.
These include our 'Respect lives here' initiative and updates to our health
and safety management system to incorporate measures to address
risks associated with unlawful and inappropriate workplace behaviour.
As part of our prevention strategy, we are also enhancing our education
and training programs to help people understand our expectations
of appropriate workplace behaviour. This includes how to identify,
report and address conduct-related issues.
The Bank promotes appropriate standards of conduct in accordance with
our Code of Conduct at all times. We take appropriate disciplinary action in
relation to any breaches of our Group Conduct Policy, the Code of Conduct
or the Group’s values, up to and including dismissal from employment.
Employee wellbeing
support framework
With customers facing cost of living
pressures, our frontline teams may
be exposed to more customers
experiencing vulnerability. To support our
people, wellbeing considerations have been
embedded in our processes for supporting
customers in vulnerable circumstances.
Our customer‑facing teams are guided
by the employee wellbeing support
framework, which sets out prevention
measures and support systems for our
people to proactively manage psychological
wellbeing risks when engaging with
customers experiencing hardship and
financial vulnerability.
Respect lives
here training
Our 'Respect lives here' training is focused
on building our organisational capability
to prevent and respond to inappropriate
behaviours, including through active
bystander training. Resources are available
to all employees, providing examples
of respectful and disrespectful behaviours
and the lived experiences of diverse
people in the workplace. A new learning
module launched in 2024, ‘Preventing
everyday sexism’ explores the harm that
everyday sexism has in the workplace and
explains how to respond using the active
bystander strategy. The completion rates
are monitored by the Executive Leadership
Team, who actively encourage their teams
to complete the training. Since launch,
36,900 employees have completed this
new learning module.
We remain committed to fostering a work environment where everyone
feels respected, safe and included. We continually evaluate our programs
and processes to support this.
32
OUR COMMITMENT TO SUSTAINABILITY
Feeling respected and included at work
Embedding diversity, equity and inclusion
Inclusion and respect are integral to how we live our values,
meet the needs of our customers and deliver our strategy.
As we work towards having a workforce which reflects the
diversity of our customers and communities, we are focused
on creating an environment where we embrace differences
and celebrate the things we have in common.
Our 2024 Diversity, Equity and Inclusion (DEI) strategy
is focused on holistic initiatives which strengthen respect
and address the attitudes, behaviours and standards that
can normalise disrespect and lead to inequality. We want
employees to feel safe, supported and valued; have equitable
opportunities to grow; and experience an inclusive culture
that extends to our customers.
Our business unit DEI councils and six employee diversity
networks support the execution of the DEI strategy
by providing feedback and lived experience. This can
inform employee and customer solutions, implementation
of learning to support active bystander behaviour and
raise awareness of days of significance. For example, our
Enable network advocates for our people with disability,
people who are neurodivergent and carers. This year the
network supported the development and launch of our new
Accessibility and Inclusion Strategy on International Day
of People with Disability. These groups contribute to embed
inclusive behaviours which help us make progress on our
representation measures and employee engagement.
Our diversity goals
We continue to work towards our diversity goals to create a workplace that better
reflects and supports the communities in which we live and work. We are making
progress towards our goal of 47–50% gender equality in Executive Manager
and above roles. We still have work to do to achieve our goal of 3% Aboriginal
and/or Torres Strait Islander representation in our domestic workforce. This year
we developed a new goal to track the cultural diversity of senior leaders, aiming
for 40% cultural diversity for Executive Manager and above roles by 2028.
Gender
equality
44.9%
in Executive Manager and above roles
47‑50%
by 2025
Indigenous
workforce
(ancestry)
1.2%
of domestic workforce
3%
by 2026
Cultural
representation
37.0%
in Executive Manager and above roles
40%
by 2028
Learn more about our commitment to DEI at commbank.com.au/diversity
Improving gender equality outcomes
The Bank has a sustained focus and commitment on improving gender equality outcomes. In Australia, 53.7% of our workforce
are women. Women represent 44.9% of our leadership roles, and 68.3% of our customer service operational roles in Australian
branches and contact centres. We have a lower proportion of women in senior roles and higher paying technical specialist roles,
which is reflected in our Workplace Gender Equality Agency (WGEA) median gender pay gap of 27.6% and average gender pay
gap of 22.3%, as at 31 March 2024. We recognise there is still more to do to reduce our gender pay gap across the Bank.
We are taking a range of actions to accelerate our progress. This includes regularly reviewing gender data in key people
processes such as selection, performance and succession planning to mitigate any potential bias where leader discretion may
have impacted promotions and progression. Group Executives and leadership teams receive tailored insights related to the
gender pay gap, providing management oversight to help inform more targeted action. This year women represented 48.6%
of all promotions and internal appointments to Manager and above roles. We continue to support talent pipelines, including
through our graduate program and engagement with the community, to help encourage more women to pursue careers
in technology.
For source information and definitions, see our Glossary on pages 312–327.
Learn more about our actions to accelerate the progression of women and our Gender equality action plan at commbank.com.au/diversity
33
COMMONWEALTH BANK
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OVERVIEW
Developing tech
talent pipelines
We have continued to invest in attracting
the next generation of technologists to CBA.
This year we welcomed 206 new graduates.
Our graduates join our data science, engineering
and cyber security teams in our Technology
hubs around Australia. During the program,
they will complete 12 months of formal learning
as well as experiential on the job learning over
three six‑month rotations. They are provided
with targeted technical learning and exposure
that is aligned with both business demand and
graduates’ individual development plans and
goals. Our graduates will play a key role in helping
CBA modernise our technology estate and use
technologies like AI to enhance the customer
experience, and continue to bring diverse talent
into the Bank.
We are also providing opportunities for our people
to upskill in emerging technology areas, to build our
future capability. We partnered with Amazon Web
Services to launch the CloudUp for Her program,
which had 1,300 participants.
Helping our people build future skills
We are focused on instilling a culture that never stops learning and values
growth and development. We recognise in the rapidly changing world of work,
we need to access the right skills at the right time to deliver better, sooner
and safer for our customers. We also understand our people want to develop
new and relevant skills, to enhance their abilities and career opportunities.
Our ambition is to skill our people and communities for the future and support
continual learning and development.
Our approach to upskilling and reskilling remains focused on the technical,
behavioural and leadership skills required to deliver our strategy, manage
our risks and ready our people for the future of work. Some of our technical
reskilling programs include reskilling people to secure roles across risk, data
and analytics, product ownership, business banking and customer service. We
upskill and reskill our people through formal programs and accreditation, or via
self-directed learning using resources such as our learning experience platform.
Returning from career breaks
Our Career Comeback program is an opportunity for
people to return to the workforce, bringing their wealth
of experience to our business after taking a break of two
years or more, for any reason. The 12-week program
includes a comprehensive induction process, coaching,
mentoring and networking opportunities to support
the transition back to work. Upon completion of the
program, participants may be eligible for a permanent
position at the Bank.
Supporting
community skilling
We see a role in helping communities
build the right skills for the future
economy through community skilling
initiatives. This year we partnered
with Tech Council Australia and
Year 13 to deliver two national
virtual work experience programs
featuring diverse CBA talent
across software engineering and
data science. Year 13 offers a free
and easily accessible program
that allows young Australians
to complete tasks and activities
designed by industry professionals
and relevant to in‑demand careers,
such as software engineering
and data science. Through our
partnership with Year 13 we have
been able to reach over 700,000
young Australians, connecting
our people to help build future skills.
Providing opportunities to learn and grow
39%
94%
retention in business
banking analyst
reskilling program
of vacancies
this year
filled internally
60%
reskilling conversion to
hire within nine months
of program completion
“ The training and invaluable
support from mentors and
peers through the program
made me feel empowered and
confident in my career again.”
Pooja Sharma
34
OUR COMMITMENT TO SUSTAINABILITY
Our people’s experience
People Engagement Index
84%
82%
84%
May 2024
September 2023
March 2023
Managing our Enterprise Agreement and entitlements
The CBA Enterprise Agreement 2023 (EA) sets out the terms and conditions for more than 34,500 of our level 1 and 2
Australia-based employees. To better support the evolving needs of our people, the EA included greater flexibility in working
hours, tiered pay increases of up to 13% across three years for eligible employees and more leave. We now offer up to
18 weeks paid parental leave, available to both parents, with no qualifying period and with greater flexibility in how this leave
is taken. More than 90% of our people voted in favour of the new agreement.
We recognise the importance of ensuring our people are correctly paid their employee entitlements. Following our
Group-wide review of employee entitlements in 2018, we have implemented controls to mitigate the risk of non-compliance
with obligations under our EA and legislation. This includes assurance controls over a number of entitlement areas, such
as overtime, personal leave and minimum salaries, to validate that they have been delivered in accordance with legislative
requirements. If we discover a discrepancy, we aim to correct within a 60-day timeframe. Where appropriate, we also engage
external firms to assist with compliance reviews and assurance. Compliance is overseen by the Non-Financial Risk Committee,
who receive a people risk report detailing any identified discrepancies, root causes and remediation outcomes.
Financial wellbeing
support for employees
Many Australians are feeling the
pressure from the higher cost of living
and we know it is also top of mind for
our people. To make things easier,
we created a cost of living support hub
with a range of tools, tips and financial
support options specifically for our
people. In 2024 our financial wellbeing
survey had 8,891 employee responses,
nearly four times more than in 2022.
Key themes included cost of living and
economic pressures, remuneration, our
employee benefit program and financial
education content feedback. These
results will inform how we engage and
better support our employees with
their financial wellbeing.
Listening to our people
Listening to our people about what is working and where we need to focus our
efforts helps us to deliver the greatest impact for our customers, communities
and shareholders. One way we listen to our people and their experiences
is through Your Voice, which includes an annual culture deep dive, quarterly
team surveys and fortnightly pulse surveys. We shifted from biannual surveys
to quarterly rhythms to better align with our ways of working.
Your Voice provides leaders and teams with insights about culture, employee
experience and the core behaviours to deliver better customer outcomes.
People engagement was 84% in our most recent survey, similar to the previous
result of 82% in September 2023, while navigating significant changes
to how and where we work, including behavioural shifts and hybrid working.
For source information and definitions, see our Glossary on pages 312–327.
35
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
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ADDITIONAL INFORMATION
OVERVIEW
Supporting our customers
We are listening to our customers to improve their experience
with us, and supporting them in all the ways we can.
Supporting in all the ways we can
We know many of our customers are
making real sacrifices due to higher
living costs and interest rates.
We are committed to lead in the
support we provide to our customers,
through good times and bad.
As our customers continue to roll off
fixed interest rates, we have a range
of flexible options that can make
it easier to manage repayments and
refinance. We are also making it easier
for customers to refinance their home
loans with our digital refinancing
application, and are proactively
contacting customers at greater
risk of falling into financial difficulty.
For those customers who are
experiencing financial difficulty,
we offer more flexible support
options that are easier to access.
These include customised payment
arrangements, interest only payments
and repayment deferrals, if required.
Our hardship and extra care teams
are trained to provide tailored and
empathetic support to our customers.
Customers can also request hardship
assistance via NetBank and the
CommBank app.
With customers experiencing
vulnerability, we aim to provide
thoughtful and relevant support.
This year, we continued to embed the
Group's procedure for identifying and
supporting customers in vulnerable
circumstances. The Group Monitoring
Plan was developed to help our teams
embed and demonstrate compliance
with the procedure. Together,
these frameworks aim to guide our
people to better identify customers
experiencing vulnerability, and
provide fair and consistent support
to those that need it. Over 38,000
of our people have also received
training on supporting customers
experiencing vulnerability.
We are working on innovative
technology methods to detect
instances of abuse for customers
in potentially vulnerable
circumstances. We are internally
testing the ability of AI to
assess transactions to identify
potential power of attorney abuse
instances. The test aims to detect
conflicts with power of attorney
agreements and send automatic
notifications to related attorneys
for awareness.
Here to help
We consider customer
needs and responsible
lending principles when
we design our products
and services.
Learn more about
our responsibility
to customers in our
operations on page 45.
App saving and spending tools
commbank.com.au/supportforyou
Cost of living hub
commbank.com.au/costofliving
Financial support options
commbank.com.au/hardship
Extra care and hardship team support
commbank.com.au/hardship
The Brighter side
of banking
Our Brighter magazine, available
at branches and on our website,
provides practical financial content
that educates, inspires and engages
readers to plan for a better tomorrow.
Each bimonthly edition includes
personal finance insights, stories on
individuals and businesses innovatively
growing their wealth, and tips on how
to make financial ideas a reality.
We also launched 'The Brighter Side'
TV series this year, which invited
Australians, including the CommBank
Matildas and Neil Perry, to talk about
their money habits and important
money lessons they have learned.
36
OUR COMMITMENT TO SUSTAINABILITY
Supporting regional
businesses
We aim to listen to the unique
experiences of our customers and
contribute to the growth of Australia's
regions. This year, our CEO and senior
business bank leaders visited the
Mid‑North Coast of NSW, where the
region is focused on economic and
business development in key sectors
such as healthcare, tourism and
specialist manufacturing. CBA visited
Birdon Group, a major maritime
engineering group based in Port
Macquarie, at their shipyard and
discussed the important innovation
and specialist manufacturing
expertise on the Mid‑North Coast.
Reducing fraud and scams losses for customers and businesses
Fraud and scams continue to become more sophisticated.
Strengthening the Australian ecosystem is crucial to making
our country less attractive for scammers. We are playing our
role in building national resilience to combat fraud and scams,
by increasing education and providing new tools. We continue
to add updated advice and learnings to CommBank Safe,
sharing fraud and scams resilience education with customers,
the community and small businesses. We are helping to upskill
business customers by providing foundational cyber training,
covering cyber defence strategies, supply chain risks and
common types of scams for businesses.
This year, CBA customer losses due to scams have halved
from the previous year. We have implemented measures
to limit the outflow of fraud and scams occurring through
cryptocurrency exchanges, by introducing declines on certain
cryptocurrency exchanges, holding digital payments for
24 hours and implementing a $10,000 per customer monthly
limit for cryptocurrency exchange payments. We have also
introduced an investment scam transaction detection model,
which supports existing scam detection tools to screen
transactions in real‑time and identify potential scams for
our teams to investigate.
These new initiatives add to our existing security features,
including NameCheck, CallerCheck and CustomerCheck for
in‑branch verification. While the prevalence of scams remains
high for Australians, our anti‑fraud and scams initiatives have
collectively made a difference for customers.
See our resources to help protect customers at
commbank.com.au/safe
Our regional commitment
We continue to support the regional Australian communities we serve. While
the trend of our customers engaging with us digitally continues, we also know
our branches are important, especially to those in regional communities. CBA
continues to maintain the largest branch network in Australia and we reinforced
this support with a CBA‑branded regional branch closure moratorium until
at least the end of 2026. Our branches in some regional locations have been
adapted to meet customers’ needs by servicing their local communities in the
morning, before supporting customers via phone in the afternoon.
We are also improving our regional support for small and medium‑sized
businesses, engaged in commercial and agricultural sectors, while deepening
our connection with regional towns. Our regional business bankers and
product specialists are building more presence at their local branches. We have
increased our events in regional areas and engagements with local councils, to
build awareness of our business support offerings.
To meet our customers' evolving preferences, Bankwest will become a digital
bank nationwide. We can now offer two distinct banking options to support
customers’ – a full‑service banking experience through CBA, and a simpler,
digital, broker‑led experience through Bankwest. In regional Western Australia,
15 Bankwest branches will become CBA ‑branded branches, adding to the
existing 19 CBA‑branded branches, maintaining access to a full‑service
banking experience with CBA in these regions.
37
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Measuring and improving
our customers’ experience
We aim to consistently provide superior customer experiences. To do this,
we need highly engaged employees, and high‑quality products and services
that suit customers’ needs.
We seek customers' feedback as they bank with us. Where factors negatively impact our customers experience, we focus
on understanding the underlying cause and improving it. Net Promoter Score (NPS) is a key measure we use to understand
the quality of our customers’ experience, giving insights on how we can strengthen relationships and nurture deeper
connections and trust. NPS scores are externally syndicated, offering an independent perspective of how our customers
see us and a goal for our organisation.
NPS is used in addition to direct customer feedback and operational metrics to measure our customers’ experience regularly.
We seek advice from our Community Council to better understand community expectations. We also track customer measures
in line with key risk indicators for CBA. When negative trends are identified, we take action to enhance outcomes and uphold
risk and performance standards.
We acknowledge that we still have more to do to improve customer experience. We are committed to embedding customer
feedback, maturing our use of operational metrics and exploring new ways to elevate the customer experience with CBA.
Learn more about Board discussions of customer complaints on page 86.
Understanding customer experience
38
OUR COMMITMENT TO SUSTAINABILITY
Fixing breakpoints for our customers
Our customers expect us to be simple and easy to bank with. While
we aim to get things right every time, when things go wrong, how we
respond can make a big difference to our customers. When customers
take the time to make a complaint or provide feedback, it is an
opportunity for us to listen, learn and make things right.
We are particularly focused on understanding our customers’ experience
related to significant interactions they share with CBA, such as
obtaining a home loan or opening an account. These moments that
matter are tracked through customer feedback to highlight bright spots
to celebrate and improvement opportunities we can work on. We use
supporting mechanisms such as customer focus groups and internal
forums to assess feedback, monitor insights and understand the root
causes of issues. These help us prioritise work and deliver more effective
solutions sooner for customers.
For example, through our customer forums, we heard our customers’
frustrations when they were unable to complete a task in their
preferred channel. In response, we aim to provide simpler and more
digitally‑enabled processes to improve experiences and reduce
complaints. Improving the processes for many of our products and
services, including credit cards, transaction accounts and transaction
disputes, also reduces the need to call or go to a branch. We are
also creating a reimagined digital experience for customers to lodge,
track and resolve their transaction disputes.
We implemented a real‑time AI model that helps to better differentiate
between complaints and feedback. We are also using AI to create
greater efficiency in complaints, allowing our people to focus on more
meaningful complaints resolution. AI is supporting us to generate
complaint acknowledgement letters for customers, reducing the time
to prepare a letter from 20 minutes to 13 seconds. These efficiencies
allow us to enhance our focus on solving complaints and providing
better outcomes for customers.
Our investment in process improvements such as complaints
identification, digitisation and training is resulting in fewer complaints.
We are tracking a 41% decrease in complaints at the Group level this
financial year from the prior year.
We aim to further improve processes to reduce breakpoints, complaints
and improve our customers’ experience.
NPS
We currently hold the #1 NPS ranking
across major banks for Consumer, Digital
and Institutional categories, and have
held this ranking across all for 19 months.
This year our Business NPS ranking has
dropped to #2 after holding the #1 ranking
for 28 consecutive months. This change
highlights the importance of focusing
on continuously improving our service
and prioritising an even stronger focus
on the customer in everything we do.
Using feedback for frictionless payments
Listening to customer feedback has allowed the Business Bank
to make real‑time payments better for our customers. We heard
that payments were too slow and not meeting the evolving needs
of businesses. Analysis of feedback identified low payment
limits, fraud review and payment holds as some of the root
causes of slow payments. Cross‑functional teams acted quickly
to increase CommBiz payment processing limits to $150 million,
and we extended fraud monitoring hours of operation to remove
payment blockers. Since implementing these changes, over $5 billion
has been processed, providing a better customer experience.
‑2.7
Key
CBA
Peers (major banks)
10.2 on FY23
‑30
‑22
‑14
‑6
2
10
Jun 24
Jun 23
Jun 22
Business NPS
8.4
Key
CBA
Peers (major banks)
4.5 on FY23
‑10
‑6
‑2
2
6
10
Jun 24
Jun 23
Jun 22
Consumer NPS
39
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Supporting financial inclusion
As Australia’s largest bank, it is important that we provide tailored and accessible
solutions to promote the financial inclusion of all customers and communities.
Improving accessibility for our customers
This year we redesigned our bank cards with features to make
them more accessible for all customers, especially those who
are blind or have low vision. We worked with Vision Australia
to conduct user testing of prototype cards with individuals
experiencing blindness or low vision. We gathered insights
on the challenges faced and how accessibility features can
address them. Tester feedback helped inform our design
choices and consideration of new features, such as increased
font size and thickness, and tactile identification dots and
notches. These changes have made our cards easier to use
for many of our customers, especially those with blindness
or low vision. By making more elements of the customer
experience accessible, we can help more of our customers
experience independence in their banking.
Our Accessibility and Inclusion Strategy
Most Australians have access to transaction
banking. As we bank one in three Australians,
our approach to inclusion aims to help
customers – regardless of background,
ability or circumstance – access and use our
products and services with dignity and ease.
This year we refreshed our Accessibility
and Inclusion Strategy and set our
goal to deliver ‘Dignity by Design’. Our
co‑designed strategy is informed by
engagement with the communities we seek
to positively impact. The strategy details
our plan to design inclusive products,
services, experiences and workplaces for
our customers, people and communities.
We continue to evolve and improve
our services for greater accessibility
and inclusion by translating guides
and documents into Easy English and
languages other than English. We have
completed extensive branch upgrades
this year totalling $60 million which cater
to a wide range of customer needs and
provide dedicated interactive spaces for
customers. Accessible branch features are
supported by CBA’s Equal Access Toolkit
to provide an equitable branch experience
for all customers. The toolkits were
recognised by the Australian Good Design
Awards and Australian Disability Network
Confidence Awards for their positive
impact on customers, while empowering
our teams to deliver appropriate support.
Learn more about our strategy
at commbank.com.au/accessibility
Notches to help orient and differentiate
cards for ATM use
Increased font size and thickness
to help read key details
Tactile dots to further help with
differentiation
Contrasting colours and patterns
to support low vision differentiation
LEE M. CARDHOLDER
0000 0000 0000 0000
Exp.12/25 cvc 000
Authorised Signature Not Valid Unless Signed
PLACARD 0000 0000000 commbank.com.au
Made with 83% recycled plastic
world
Ultimate
Awards
Debit
Platinum
Debit
40
OUR COMMITMENT TO SUSTAINABILITY
Removing barriers to banking
Aligned with our purpose, we are committed to providing
banking services for all Australians and helping them achieve
their financial goals. We recognise that there are members
of the Australian community who experience systemic
barriers to banking and financial inclusion. We aim to provide
equitable access to banking and take steps to understand
and remove barriers that exist for our diverse customer base.
We seek to deliver products and services that can meet
the diverse financial needs of our customers. In many
cases, we use data to identify where we can better support
customer cohorts, including those on government benefits,
to encourage greater access to fee‑free and low‑cost
products such as our Streamline Basic Account.
Improving financial inclusion for First Nations customers and
communities remains a focus. Alongside our branch teams and
Indigenous Customer Assistance Line, our First Nations Reach
program was established to maintain and improve access to
basic banking services for remote Indigenous communities.
Our teams, supported by First Nations employees, have visited
14 of the most remote communities in Australia, including the
Fitzroy Valley in the Kimberley Region. During visits, our people
help open accounts, restore access to banking services, resolve
identification issues and assist with fraud and other enquiries.
We are also committed to removing barriers for growing
Indigenous businesses. Our Indigenous Business Banking
team and Indigenous banking concierge, a dedicated contact
line for Indigenous businesses, provide tailored support
for First Nations business owners. Our concierge service
provides tailored offerings of our business banking products,
such as our working capital solutions, merchant and
corporate card products, to help build Indigenous businesses.
We are fortunate to have around one in two new migrants
to Australia trust us with their banking needs, and recognise
the unique challenges they face in banking and financial
wellbeing. In partnership with the Settlement Council of
Australia, we launched the 'Banking is for everyone' initiative
this year. The program is designed to develop the cultural
competency of branch staff and increase the ability of
migrant customers to bank confidently and independently.
To help improve the financial wellbeing of migrant and
refugee customers, we conducted an internal review
to find ways we can better support them, including
those experiencing financial abuse or vulnerability more
broadly. The CBA Community Council supported us to
develop 12 recommendations to improve our products
and services which we are currently actioning.
Learn more on how we are supporting communities on pages 42–43.
Learn more about our First Nations Reach program at
commbank.com.au/firstnationsreach
Improving kids’ financial capability
Kit, a pocket money app for kids, aims to improve the financial capability of young people through fun and interactive learnings
and challenges. Kit has released the 'Future of financial learning', a report that assesses children’s financial knowledge,
education and parental concerns about their financial wellbeing. The study highlighted that parents feel positive about
embedding technology and gamification into financial capability learning, and are confident that technology can support
young people’s financial wellbeing and help improve resilience to scams.
In addition to the existing earning and saving features with parental controls, Kit has created gamified learning experiences
called Money Quests. Kids complete mini‑games and quizzes on topics such as spotting a scam, to earn rewards and get nudges
that promote real‑world behaviours, like setting up a smart savings goal. Kit has over 61,000 customers using the app.
41
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Strengthening our
communities
Creating opportunities for
women and girls in football
We launched the Growing Football Fund in partnership
with Football Australia, to increase sporting inclusion
and development opportunities for women and girls.
The Fund has provided 121 grants to clubs and associations,
supporting grassroots participation to attract and retain
women in football. We have also supported the development
of a coaches hub, sharing plans and coaching guidance
for developing coaches. By increasing accessibility of
opportunities for women and girls, we aim to inspire
and develop the CommBank Matildas of tomorrow.
We are committed to supporting our communities
as we seek to build a brighter future for all.
Extending our commitment
to help end financial abuse
Our Next Chapter program is our long‑term commitment
to help address domestic and family violence (DFV) and
financial abuse in Australia. Our Next Chapter team
continues to provide free and confidential support to
victim‑survivors of DFV and financial abuse, no matter
who they bank with. This year the Next Chapter team
provided support through 21,215 individual interactions.
The Financial Independence Hub delivered by Good
Shepherd Australia New Zealand and funded by CBA
continues to provide free, confidential and ongoing
support for people who have experienced financial
abuse to help them feel more confident with money,
regain control over their finances, and plan for the future.
Support includes financial coaching and referrals to
support services. Since inception in 2020, the Hub has
supported 8,983 participants, and we expect to meet
our aspiration of supporting over 10,000 people by 2025.
To help prevent more individuals from experiencing
financial abuse, this year we made our abuse in
transaction description AI model free for use by any bank
in the world. Since launching our AI model in 2021, we
have been able to detect and address over 1,500 cases
each year of more severe forms of abuse. The model
complements our automatic block, which has blocked
nearly one million transactions that included offensive,
threatening or abusive language over the past three years.
This year we brought together leaders from business,
government and the DFV sector at the Financial Abuse
Leadership Summit. We also launched Next Chapter
Innovation, our program to support not‑for‑profit
organisations delivering innovative responses to
financial abuse recovery. Our five inaugural partners
each received access to grants of $100,000 or
$200,000, as well as expertise and mentoring from
CBA leaders.
One of our inaugural Next Chapter Innovation
partners is Afghan Women on the Move, who CBA is
supporting to address the nuanced challenges of DFV
and financial abuse in multicultural communities. By
addressing language hurdles, encouraging connection
and fostering support, their project empowers
victim‑survivors on their path to healing and stability.
Learn more about our Next Chapter commitment at
commbank.com.au/nextchapter
42
OUR COMMITMENT TO SUSTAINABILITY
Supporting community
organisations
Through contributions to the CommBank Staff
Foundation, volunteering and other charitable
and employee giving initiatives, our people’s generosity
has provided support to hundreds of organisations.
Our people are able to show their support to
long‑standing charitable partnerships including
Can4Cancer, where almost 7,000 employees
participated in 2023 to raise much‑needed funds
for cancer research. The Foundation also empowers
our people to support organisations they care about
through our Community Grants program.
CBA supports workplace giving and
contributed $2 million to the CommBank Staff
Foundation, who in total provided $3.1 million
to organisations across Australia this year.
Engaging with First Nations
communities
Our experience has taught us that
engaging with First Nations peoples
has improved the support we can
provide First Nations employees,
customers and communities.
We continue to build respectful and meaningful relationships with
the First Nations communities we serve. Our goals to help create
meaningful opportunities are outlined in our seventh Reconciliation
Action Plan (RAP), focused on enhancing access to products and
services, building community trust in our institutions, providing
access to equal and meaningful career opportunities, and
supporting First Nations business growth. Through these priorities
we seek to build a brighter future for First Nations peoples.
As part of providing a compelling and supportive work
environment, we seek to create and facilitate opportunities for
First Nations peoples to access education and career pathways.
This year we expanded our school scholarships to support
20 First Nations students complete their studies and help
them achieve their personal and career goals.
In line with our commitment to support self‑determination, our
Indigenous Advisory Council, Indigenous Leadership Team and
Aboriginal and Torres Strait Islander Community of Practice are
important channels for us to engage with First Nations peoples
on the decisions that affect them. These forums help inform
the activities we undertake to support First Nations employees,
customers and communities. This guidance continues to shape
our reconciliation programs across the organisation and improve
the services we provide First Nations people.
Learn more about how we are removing barriers to banking for
First Nations customers on page 41.
Learn more about our supplier diversity commitments on page 47.
Learn more about our reconciliation priorities in our RAP
at commbank.com.au/reconciliation
$2m
awarded in Community Grants
to 201 community organisations
32%
of our people participated
in workplace giving through
the CommBank Staff Foundation
32
cancer research breakthroughs
supported through Can4Cancer
since 2014
61,500+
hours volunteered by
our people
43
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
We aim to manage our business
responsibly and transparently,
and uphold a high standard
of governance to meet
our obligations.
Effective governance is essential in delivering our strategy
and provides the foundations to meet our obligations and
stakeholder expectations. Since the APRA Prudential Inquiry,
we have focused on our governance, culture and accountability.
We continue to strengthen policies, systems and processes
to deliver improved outcomes for stakeholders.
Given the significance of sustainability issues, the Board
has responsibility for overseeing efforts to improve the
experience and outcomes of CBA customers, monitoring our
culture and considering the material environmental and social
impacts of our activities. The Board oversees the Group’s
Risk Management Framework (RMF) and approves the Risk
Appetite Statement (RAS), Code of Conduct, DEI Policy, E&S
Framework and Policy, and Work Health & Safety policies.
CBA’s Code of Conduct outlines the Board’s expectations for
how we achieve our purpose, live our values and deliver better
customer outcomes. The ‘Should We?’ test guides our decision
making and brings together our key policies and practices.
Our standards, policies and practices are embedded across
our operations and all employees undertake compulsory and
annual training on those deemed most relevant to their role.
This helps support business decisions and fair customer and
community outcomes.
Learn more about our corporate governance framework and Board
oversight on pages 80–97.
Governance
44
OUR COMMITMENT TO SUSTAINABILITY
To meet our regulatory obligations and deliver better
customer outcomes, we apply our responsible lending
guidelines in lending decisions and operations. We seek to
provide suitable products and services to our customers
and consider their financial circumstances before we lend
to them. This may mean that we turn down a customer's
application for credit due to the potential for indebtedness,
which could result in a customer being worse off.
Retail customer‑facing employees complete annual
responsible lending training and assessments. We also
periodically review, audit and assure our lending processes,
controls and decisions. Where we are found to have not
met obligations, we remediate and return the customer
as closely as possible to the position they would have been
in. We aim to provide customer education and information
to promote financial wellbeing and assist customers
experiencing financial difficulty. We also provide customers
with information and disclosure, when required, through
product terms and conditions, credit guides, key fact sheets
and credit assessment summaries.
Where our products and services fall under design
and distribution obligations, we have Target Market
Determinations to provide information that helps
customers align products to their needs and objectives.
We have a customer‑focused approach to designing and
managing relevant products. Our customer outcomes
assessments elevate the customer voice, needs and
circumstances, as well as community expectations.
Considerations include seeking to protect customers
experiencing vulnerability from poor outcomes,
meeting accessibility needs, preventing financial abuse
and delivering fair value.
Once a product is issued, we periodically monitor to check
distribution is consistent with the target market and
regulatory expectations, and to identify actual or potential
poor customer outcomes.
Where children may use our products, we take further effort
to embed safety and reduce harm for customers. This year
Kit released their public commitment to child safety,
detailing the processes that embed the National Principles
for Child Safe Organisations to minimise the risk of abuse
and misconduct. The policy, developed with input from Kit’s
Advisory Panel, sets our standards for working with children
in Kit’s operations.
Learn more about our responsible lending obligations and other
policies at commbank.com.au/policies
Operating responsibly for our customers
As Australia’s largest bank, we seek to offer all Australians
the opportunity to access banking products which are
appropriate to their needs.
Developing responsible
products for kids
Kit’s Advisory Panel has supported the responsible
development and challenge of new features of the app,
including the consideration of gamification and in‑app
rewards. The Advisory Panel is made up of experts in
working with children and families, youth mental health
and wellbeing, and financial capability fields, to advise on
product development. The Panel guided and endorsed
the development of Kit’s new gamification features,
considering gamification outcomes and reward points
in the app. The advice and expertise of the Advisory Panel
supports Kit to continue to develop and engage children
to build financial literacy and capability safely.
45
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Safeguarding personal information
We recognise the information we hold increases the likelihood of
targeted cyber attacks. Cyber security and privacy are important
issues for our customers as threats continue to rise and escalate.
Cyber security, and in particular system‑level resilience to minimise
disruptions and enhance the protection of customer and employee
information, remain top priorities. We continuously review and
evolve our internal processes and policies to keep pace with
regulatory and technological advances. We periodically engage
external firms and subject matter experts to review and provide
feedback on our cyber strategic priorities. Our security teams are
focused on understanding CBA's threat environment, the capability
of our adversaries, and our own strengths and weaknesses. We also
look to identify and mitigate potential weaknesses that eventuate
through our suppliers, so we can limit the impact of cyber incidents
and protect our customers.
Learn more about how we manage risk on pages 70–79.
Using AI responsibly
CBA applies a principles‑based approach to the design,
development, deployment and use of AI. Our policies and
frameworks are in place to safely manage the pace of advancements
in AI, and how regulatory and industry bodies continue to refine their
positions on AI. To support the safe scaling of AI across CBA, we
have a Responsible AI toolkit and guides, which assist our people
to responsibly use AI and Generative AI models across the Bank.
Our Responsible AI toolkit helps our AI developers deliver responsible
and ethical AI models at CBA. The toolkit contains guidance and
examples to help with key modelling steps and assessing AI model
fairness. In recognition of the transparency and diligence embedded
within our AI approach, CBA was jointly ranked first in the world
amongst global banks for leadership in Responsible AI, and sixth
overall for AI maturity, in the Evident AI Index.
Combatting
financial crime
As a financial institution, we have a role to play
in detecting, deterring and disrupting financial
crime. Supporting Australia’s collaborative crime
protection and working with regulators and law
enforcement to protect the financial system
from misuse by bad actors, is a continued focus.
This year we continued to uplift internal controls,
policies and tools to better detect and deter
financial crime. We implemented a generative
AI‑supported customer screening pilot to
improve data collection and reduce manual
processes. We also released a new cloud service
which will streamline eight existing investigation
processes into one unified and purpose‑built
system, to provide a single view of customer and
transaction data.
Consolidating data sources provides significant
efficiency gains by streamlining the investigation
process. Removing manual work allows teams
to focus on the identification of criminal activity
and better manage active investigations.
See our financial crime commitments and policies at
commbank.com.au/policies
Privacy
We take our responsibility to protect the
personal information and privacy of customers
seriously. To help keep customer information
safe, the Bank applies security and privacy
controls around the collection and handling
of personal information and maintains an internal
Group Privacy Policy. The public Group Privacy
Statement sets out how the Bank collects and
handles personal information. For suppliers who
collect or handle personal customer information,
we take a risk‑based approach to due diligence
assessments to review their data and privacy
governance, policies and incident response in line
with our responsibilities. Through our delivery
of commitments in the Privacy Enforceable
Undertaking (EU) with the Office of the Australian
Information Commissioner, we have worked to
enhance our customer personal information
management and completed all formal obligations
under the EU in 2024. We acknowledge the
challenges to keep our data and customers safe
continue to grow and evolve, and work to meet
regulatory and customer expectations.
See our Group Privacy Statement
at commbank.com.au/privacy
Improving customer trust in banking
2,247
phishing sites taken down this year
Our six
AI principles
1
Human, social and
environmental
wellbeing
4
Privacy and security
5
Reliability
and safety
6
Accountability
2
Fairness
3
Transparency
46
OUR COMMITMENT TO SUSTAINABILITY
Meeting community expectations
Working with our suppliers
Suppliers help CBA achieve our purpose and strategic ambitions and we are
committed to supporting the growth and prosperity of businesses that reflect
our population. We are proud to contract with over 3,900 businesses, with
26 being First Nations businesses. We seek to provide greater economic
participation and self‑determination opportunities for First Nations businesses
in urban and regional Australia. This year we appointed an Indigenous
procurement Executive Manager to further support First Nations economic
empowerment, through supplier spend and relationship development.
Indigenous‑owned suppliers are providing the Bank with essential products
and services. Baidam Solutions is an Indigenous‑owned supplier that provides
support to our cyber security teams to help protect customers. Our partnership
with Baidam enables further Indigenous economic opportunities.
Respecting human rights
Our E&S Framework details our commitments to respect human rights.
To meet our commitments, we have processes in place which seek to identify
and consider potential human rights risks and impacts in our business
operations and supply chains.
Our ESG risk assessment tool plays an important role in our commercial and
corporate lending processes. The tool assists our bankers to identify and
assess the ESG risks our customers are exposed to, the mitigating actions our
customers take, and how lending aligns to the commitments made in our E&S
Framework. This includes modern slavery and human rights risks. This year
we refreshed the modern slavery due diligence questions used by Business
Banking in the ESG risk assessment tool, to support the identification and
mitigation of risks in customers’ operations and supply chains. To support this,
we also conducted training for bankers and credit risk teams, which included
a focus on modern slavery risk.
Our approach to modern slavery risk management is informed by external
experts on our Modern Slavery Advisory Council. This year the Advisory Council
considered and supported our Group‑wide modern slavery strategy, which aims
to further enhance our modern slavery due diligence, grievance and response
and any associated remediation, and reporting.
To assist in developing positive working relationships with First Nations
stakeholders, we introduced the Human Rights of First Nations Stakeholder
Grievance Process Framework, late last financial year. The process seeks to
provide an avenue to raise directly with us, concerns regarding possible human
rights impacts connected with CBA’s business lending activities. No grievances
were raised through this process this financial year.
See our Grievance Framework and Process at commbank.com.au/policies
Our approach to tax
CBA is one of the largest taxpayers in
Australia. We recognise the important
contribution taxes make to support
government assets and services.
Our approach to managing our tax
affairs is in accordance with CBA’s
values, purpose and strategy. We seek
to comply with prevailing tax laws in all
jurisdictions that we operate in, and to
maintain transparent and collaborative
relationships with tax authorities.
See our Tax Transparency Code at
commbank.com.au/reporting
Position on political
donations
The Bank’s external communication and
engagement policy prohibits political
donations in the form of cash or money.
However, we pay to attend political events
and forums. This year, we spent $60,000
with the Australian Labor Party, $60,000
with the Liberal Party of Australia, and
$12,000 with the National Party of
Australia. Consistent with our regulatory
obligations, these payments are disclosed
to the Australian Electoral Commission.
Aligned with our commitment to
reconciliation, we made a $2 million
donation to Australians for Indigenous
Constitutional Recognition and a
$50,000 donation to the Uluru Dialogue.
These contributions were declared to
the Australian Electoral Commission
as relevant payments under the
referendum disclosure scheme.
Speaking up
We strive to create a work environment
that promotes the right behaviours.
Providing our SpeakUP services supports
our people and external partners to raise
concerns safely, including anonymously
if needed. Support and protection
are provided to whistleblowers under
the Group Whistleblower Policy
and applicable laws.
The Audit Committee and an executive
committee receive periodic reporting
on the operation of SpeakUP. This year,
331 reports were made to the SpeakUP
Program, consistent with 2023. Of
these reports, 65 were considered
whistleblower cases.
47
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Sustainable financing
$bn
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Sustainability funding (cumulative)1
54.2
44.7
30.6
–
–
Renewable energy exposure 2
6.3
4.8
4.2
–
–
ESG bond arrangement
18.6
8.6
13.6
7.9
9.5
Operational greenhouse gas emissions
tCO2-e
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Group
Market-based reporting
71,149
67,433
35,745
32,955
–
– Scope 1 emissions
7,258
7,891
6,667
8,768
–
– Scope 2 emissions3
33
12
0
1,812
–
– Selected Scope 3 emissions4
63,858
59,530
29,078
22,375
–
Location-based reporting
152,256
157,668
137,481
152,109
174,413
– Scope 1 emissions
7,258
7,891
6,667
8,768
12,757
– Scope 2 emissions
63,609
74,577
83,249
95,762
103,818
– Selected Scope 3 emissions4
81,389
75,200
47,565
47,579
57,838
Operational greenhouse gas emissions
tCO2-e
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Australia
Market-based reporting
56,891
50,852
27,372
24,080
–
– Scope 1 emissions
5,195
5,165
4,613
6,095
–
– Scope 2 emissions3
0
0
0
0
–
– Selected Scope 3 emissions4
51,696
45,687
22,759
17,985
–
Location-based reporting
131,269
128,888
118,517
136,319
159,898
– Scope 1 emissions
5,195
5,165
4,613
6,095
9,992
– Scope 2 emissions
58,312
62,366
72,658
87,035
96,262
– Selected Scope 3 emissions4
67,762
61,357
41,246
43,189
53,644
Environmental
Sustainability performance
Assurance report
PwC has provided assurance on these metrics on pages 48–55, for the year ended 30 June 2024, unless otherwise indicated.
The PwC Assurance Report is provided on pages 56–59.
For definitions of metrics in this section, see Glossary on pages 312–327.
A more complete set of metrics is available for download at commbank.com.au/sustainabilityreporting
48
OUR COMMITMENT TO SUSTAINABILITY
Operational greenhouse gas emissions
tCO2-e
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
New Zealand5
Market-based reporting
4,024
4,637
2,554
4,960
–
– Scope 1 emissions
1,529
1,807
1,469
2,189
–
– Scope 2 emissions3
33
12
0
1,812
–
– Selected Scope 3 emissions4
2,462
2,818
1,085
959
–
Location-based reporting
5,066
5,740
3,926
4,960
5,831
– Scope 1 emissions
1,529
1,807
1,469
2,189
2,277
– Scope 2 emissions
1,075
1,115
1,372
1,812
1,904
– Selected Scope 3 emissions4
2,462
2,818
1,085
959
1,650
Operational greenhouse gas emissions
tCO2-e
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
India6
Market-based reporting
7,190
–
–
–
–
– Scope 1 emissions
318
–
–
–
–
– Scope 2 emissions3
0
–
–
–
–
– Selected Scope 3 emissions4
6,872
–
–
–
–
Location-based reporting
10,473
–
–
–
–
– Scope 1 emissions
318
–
–
–
–
– Scope 2 emissions
1,802
–
–
–
–
– Selected Scope 3 emissions4
8,353
–
–
–
–
Operational greenhouse gas emissions
tCO2-e
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Other overseas7
Market-based reporting
3,044
11,944
5,819
3,915
–
– Scope 1 emissions
216
919
585
484
–
– Scope 2 emissions3
0
0
0
0
–
– Selected Scope 3 emissions4
2,828
11,025
5,234
3,431
–
Location-based reporting
5,448
23,040
15,038
10,830
8,684
– Scope 1 emissions
216
919
585
484
488
– Scope 2 emissions
2,420
11,096
9,219
6,915
5,652
– Selected Scope 3 emissions4
2,812
11,025
5,234
3,431
2,544
1
Included in the scope of PwC's limited assurance engagement on selected Sustainability Funding and Sector-level Glidepath Subject Matter for the Group's
2024 Climate Report.
2
The Group's total committed exposure as at the end of the reporting period. Renewable energy exposure includes pure-play renewables companies and
diversified power generation customers where at least 90% of electricity generated is from renewable sources. We assess changes to customer classification
using a rolling three-year generation average. Not assured by PwC.
3
Pending acquittal of energy attribute certificates for the reporting year. In FY23, ASB offsite ATMs were reclassified as Scope 2 and Renewable Energy
Certificates (RECs) could not be purchased due to metering limitations.
4
Refers to reporting of selected Scope 3 emissions categories under the GHG Protocol. FY23 restated for overstatement in flight data, for Australia and New
Zealand, reflecting duplication of entries from exchanged tickets and alignment of factors with Australia’s Climate Active certification.
5
ASB is subject to a separate NZ mandatory disclosure regime and expects to publish a stand-alone climate report later this year. As such the equivalent
numbers in ASB’s own disclosures may change between the publication of CBA’s 2024 Climate Report and ASB’s 2024 climate-related disclosures.
6
Reported separately for first time in FY24. Prior period presentations included in 'Other overseas'.
7
India was excluded and reported separately from FY24. PT Bank Commonwealth (PTBC) is included up to 30 April 2024, after which time our divestment of the
business was complete.
49
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Renewable electricity procurement
%
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Australia
100
100
100
100
100
New Zealand1
97
98
100
–
–
India 2
100
100
100
100
–
Other overseas
100
100
100
100
–
Energy consumption – Australia
gigajoules
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Total fuel consumption
69,793
66,110
67,624
75,572
112,968
– Diesel stationary3
6,888
1,994
3,089
4,396
2,059
– Natural gas3
1,345
2,104
2,396
2,534
4,235
– Transport3
61,560
62,012
62,139
68,642
106,674
Electricity consumption – property and fleet4
329,739
332,563
344,268
399,800
445,040
Total renewable energy consumption
329,739
332,563
344,268
399,800
445,040
– Renewable electricity purchased
322,936
325,988
336,436
392,581
438,934
– Electricity generated from on-site solar panels
6,803
6,575
7,832
7,219
6,106
Total energy consumption
(including electricity and fuel)
399,532
398,673
411,892
475,372
558,008
Water, waste and paper – Australia
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Waste (Commercial and data centre operations)5
tonnes
Landfill3,6
418
335
230
470
988
Recycled3,6
157
303
205
308
585
Secure paper recycled3
123
143
203
414
580
Total waste
698
781
638
1,192
2,153
Water (Commercial and data centre operations)6
kilolitres
167,696
152,791
105,172
129,494
177,047
Office paper usage (retail and commercial operations)
tonnes
243
284
293
343
483
Environmental continued
1
New Zealand data excludes base building electricity consumption. In FY23, ASB offsite ATMs were reclassified as Scope 2 and RECs could not be purchased
due to metering limitations.
2
Reported separately for the first time in FY24. India's 100% renewable electricity procurement, since FY21, was reported under 'Other overseas'.
3
Not assured by PwC.
4
Includes energy consumption from electric vehicle charging from FY24.
5
Data centre waste reported for the first time in FY24. Prior period presentations have not been restated.
6
In FY24, invoiced amounts contributed to 81% of waste to landfill data, 87% of waste recycled data and 89% of water usage. The remainder is estimated
based on average tonnes of waste and kilolitres of water per m 2 of net lettable area.
50
OUR COMMITMENT TO SUSTAINABILITY
Customers
#m
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Total customers 1
17.6
17.1
16.6
16.7
17.3
– CBA customers
14.3
13.8
13.2
13.3
13.9
– Bankwest customers 1
1.2
1.2
1.3
1.3
1.4
– ASB customers 1
2.1
2.1
2.1
2.1
2.0
Digitally active customers 2
9.3
8.7
8.0
7.6
7.4
– CommBank app customers 2
8.5
7.8
6.9
6.4
6.1
Customer advocacy1
#
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Commonwealth Bank – Net Promoter Score
Consumer NPS
8.4
3.9
4.5
0.8
(2.9)
– Rank
1st
1st
2nd
2nd
2nd
Online banking NPS
12.0
11.1
16.8
19.0
17.2
– Rank
1st
1st
1st
1st
1st
Mobile banking app NPS
29.3
26.2
30.7
30.0
28.6
– Rank
1st
1st
1st
1st
1st
Business NPS
(2.7)
7.5
(3.2)
(5.8)
(14.3)
– Rank
2nd
1st
1st
1st
3rd
Institutional NPS
49.1
52.3
36.5
44.0
34.8
– Rank
1st
1st
2nd
1st
1st
Bankwest – Net Promoter Score
Consumer NPS
3.6
12.8
19.5
11.8
9.4
– Rank
7th
3rd
3rd
4th
3rd
ASB – Net Promoter Score
Consumer NPS
21.3
23.6
29.5
32.5
32.0
– Rank
3rd
3rd
3rd
3rd
3rd
Business and rural banking NPS3
5.2
(0.5)
(7.4)
4.0
4.2
– Rank
1st
1st
1st
1st
1st
Customer complaints
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Received4
#
538,954
921,855 984,493 1,211,808 1,182,699
– Resolved within five days
%
90
93
94
96
96
Escalated to an external dispute resolution
(EDR) scheme5
#
8,359
6,871
5,384
5,419
6,455
– Privacy complaints
#
156
98
61
123
–
Cyber defence
#
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Phishing sites taken down2
2,247
2,275
1,806
–
–
Signals analysed for potential cyber threats 1
ave per
week (bn)
274
214
184
–
–
Social – Our customers
1
Not assured by PwC.
2
Assured for the first time in FY24.
3
NPS methodology changed in 2023. Prior years are not comparable.
4
Reduction in customer complaints driven by prevention initiatives and process improvements to better differentiate between complaints and customer feedback.
5
Increase partly driven by higher complaints related to disputed transactions, fraud, scams as well as complaints concerning the service provided in connection
with financial products issued to customers.
51
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Employees
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Total full-time equivalent (FTE)
#
48,887
49,454
48,906
45,833
43,585
– Australia 1
36,572
36,697
38,153
37,245
36,330
– New Zealand (ASB)1
5,983
6,016
5,879
5,634
5,122
– India 1,2
5,630
4,721
2,854
–
–
– Other1,2,3
702
2,020
2,020
2,954
2,133
Graduates
348
343
241
191
153
Headcount
#
53,262
53,754
53,056
49,922
48,167
Employee turnover – voluntary
%
9.0
11.2
14.8
11.0
10.1
Employee turnover – involuntary
%
3.4
2.4
2.1
1.9
4.2
Employment type (headcount)
#
Full-time
32,259
32,228
32,303
31,112
32,178
Part-time
6,755
6,656
6,858
7,007
7,565
Casual
880
529
266
294
399
Safety and wellbeing
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Lost time injury frequency rate4
rate
0.23
0.58
0.51
0.72
1.12
Absenteeism
days
10.2
9.2
8.7
7.8
8.4
Health, safety and wellbeing
training5
#
55,076
56,814
59,575
51,926
49,385
People engagement and flexible working
%
May 24
Sep 23
Mar 23
Sep 22
Mar 22
Sep 21
Mar 21
People engagement index – CBA6
84
82
84
85
85
85
82
Employees working flexibly
–
81.0
–
84.9
–
84.9
–
Employees with caring responsibilities
–
59.5
–
59.4
–
56.6
–
Parental leave
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Employees who have accessed
parental leave7
#
– Female employees
1,281
1,260
1,246
1,173
1,243
– Male employees
1,031
990
942
987
909
Employees who have returned from
parental leave, and are still employed
after 12 months8
%
– Female employees
86.7
87.5
89.4
87.2
85.7
– Male employees
89.2
86.4
88.5
87.2
84.5
Social – Our people
1
Not assured by PwC.
2
India-based employees reported under 'other' for periods prior to FY22.
3
Reduction reflects the divestment of PT Bank Commonwealth (PTBC) which was completed on 1 May 2024.
4
Reduction in FY24 is driven by preventative measures and early intervention which have resulted in less injuries that incur lost time.
5
The health, safety and wellbeing training number is higher than FTE as the training is assigned annually and to new employees.
6
People engagement index (PEI) was reduced from a five-item metric to a two-item metric in February 2024, to reduce the length of the Group's quarterly
people and culture survey and time taken to complete. Internal and independent analysis was conducted to ensure the index remains reliable as a measure of
engagement. Prior year numbers have been restated accordingly.
7
Prior year numbers have been restated to only capture parental leave events that began that year, and not double-count over multiple years.
8
Not assured by PwC. Reported for the last time in FY24. This metric can no longer be reported as, from 1 December 2023, CBA offers full-time and part-time
CBA employees flexibility in how and when parental leave can be taken within two years of a child's birth or placement.
52
OUR COMMITMENT TO SUSTAINABILITY
hrs per
employee
30 Jun 24
30 Jun 23
Employee training
Total
Female
Male
Total
Female
Male
Executive Managers and above roles
27.5
29.8
25.6
22.5
24.4
21.1
Others
25.8
27.7
23.7
25.0
27.4
22.6
Average per employee
25.9
27.8
23.8
24.9
27.3
22.5
ESG training
#
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
ESG training completed (headcount)
13,023
13,552
2,911
6,240
1,560
Gender diversity
%
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Women in workforce
53.7
54.4
55.2
56.1
56.9
Women in Manager and above roles
44.9
45.1
45.5
45.2
45.0
Women in Executive Manager and above roles
44.9
44.0
43.1
41.7
41.2
Women in Senior Leadership (Group Executives)1
41.7
41.7
41.7
27.3
33.3
Gender pay equity
(female to male base salary)
ratio
31 Mar 24
31 Mar 23
31 Mar 22
31 Mar 21
31 Mar 20
Executive General Manager
0.98
0.93
0.91
0.86
0.90
General Manager
1.00
0.98
0.99
0.99
1.00
Executive Manager
0.98
0.99
0.98
0.98
0.98
Manager/Professional
0.98
0.98
0.97
0.97
0.98
Team Member
1.01
1.01
1.01
1.00
1.00
Age diversity2
%
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
<25 years
6.8
6.5
7.0
7.1
7.9
25–34 years
32.2
32.9
32.3
30.7
30.8
35–44 years
33.3
32.9
32.5
32.5
31.9
45–54 years
17.9
18.2
18.6
19.9
19.6
55–64 years
8.6
8.2
8.1
8.6
8.6
65+ years
1.2
1.1
1.0
1.1
1.0
Cultural diversity1
%
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Executive Manager and above roles
37.0
36.0
–
–
–
Other diversity metrics
%
Sep 23
Sep 22
Sep 21
Sep 20
Oct 19
CBA Indigenous workforce (ancestry)
1.2
1.0
0.9
0.8
1.5
Employees living with a disability, chronic illness or
other medical condition
6.3
7.6
7.1
6.5
8.7
Employees who identify as LGBTQIA+
4.8
5.1
4.8
4.9
3.3
Cultural diversity based on ancestry
(Sep 2023)1,2,3
Cultural
Diversity
Index
#
Australia,
NZ, British,
Irish
%
Europe
%
Asia
%
Africa,
Middle East
%
Americas
%
Indigenous,
Pacific
Islanders
%
CBA overall
0.78
44
11
34
4
1
3
General Manager and above
0.64
65
17
11
3
2
2
Executive Manager and above
0.66
63
15
15
4
1
1
2021 Australian Census (ancestry)
0.65
64
11
16
4
1
4
1
Not assured by PwC.
2
Numbers may not sum to 100 due to rounding.
3
Reported for the last time in FY24 as the group has moved to a new diversity goal to achieve 40% cultural diversity representation in Executive Manager and
above roles by 2028.
53
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Community investment
$m
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Total community investment
329.2
264.0
239.0
247.4
250.5
– Cash contributions
25.4
27.1
30.0
37.5
57.5
– Value of time volunteering
3.8
2.5
0.7
1.2
0.7
– Forgone revenue
274.2
210.5
188.2
187.5
178.5
– Program management costs
25.8
23.9
20.1
21.2
13.8
Total community investment as a percentage
of cash net profit before tax
%
2.3
1.8
1.8
2.0
2.4
Our commitment to end financial abuse
#
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Financial Independence Hub (participants
supported)1,2
4,505
1,598
1,440
1,440
–
Next Chapter and Community Wellbeing
(customer interactions)
21,215
20,560
17,107
–
–
Community reputation
#
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
RepTrak reputation score1
65.8
66.3
63.3
65.0
61.6
Indigenous community support
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Indigenous cultural development
(training completion rate)3
%
40.4
41.7
55.8
17.8
8.0
Indigenous Customer Assistance Line (calls received)
#
260,004
198,504
184,927
181,460
206,436
Australian Indigenous supplier spend
$’000
22,654
9,078
7,028
6,093
4,395
– Direct spend4
22,200
8,338
7,028
6,093
4,395
– Directed spend
454
740
–
–
–
Social – Our communities
1
Not assured by PwC.
2
FY24 increase is attributable to changes made in FY23 to broaden the support provided to participants of the Financial Independence Hub, as well as support
provided under the Extended Care program which merged with the Financial Independence Hub during the year.
3
Prior periods have been restated to exclude other overseas and service providers to align with the reporting criteria.
4
Does not include identified corporate credit card spend of $86,093 in FY24 with Indigenous suppliers. Credit card spend is not assured by PwC.
54
OUR COMMITMENT TO SUSTAINABILITY
Governance
Board composition1
#
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Total Directors
9
10
11
10
9
– Female
4
5
5
4
5
– Male
5
5
6
6
4
Independent Non-Executive Directors
8
9
10
9
8
Female Directors on Board
%
44
50
45
40
56
Group compliance training2
%
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Training completion rate – Code of Conduct
99.9
99.8
99.6
99.5
99.6
Training completion rate – mandatory learning
99.9
99.8
99.6
99.5
99.5
Conduct and whistleblowing
#
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Substantiated misconduct cases
2,259
1,122
1,071
1,825
1,851
– Sexual harassment/sex-based harassment3
18
11
5
2
10
– Discrimination3
0
0
1
0
0
– Harassment, bullying, victimisation3
2
3
0
0
3
– Fraud/theft3
41
47
23
25
27
– All other breach of role expectations, policy or process3
2,198
1,061
1,042
1,798
1,811
Misconduct cases resulting in termination
180
119
76
105
136
Conduct captured by The Banking Industry Conduct
Background Check Protocol3
71
57
26
39
48
SpeakUP Program cases
331
331
317
335
284
– Whistleblower cases
65
81
96
123
103
Incidents and outages4
#
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 21
30 Jun 20
Data breaches reported to the OAIC
4
5
3
6
12
Significant IT incidents
4
8
21
20
21
1
Numbers are actuals, not assured by PwC.
2
Training completion rates are not 100% as allocated training may be overdue. There are remuneration consequences for employees who do not meet their
training obligations.
3
Reported for the first time in FY24. Not assured by PwC.
4
Assured for the first time in FY24.
55
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
To the Directors of Commonwealth Bank of Australia
Independent Assurance Report on Selected Sustainability Information for
the Commonwealth Bank of Australia (the Bank) and its controlled entities
(together the Group) in its 2024 Annual Report for the year ended 30 June 2024
The Board of Directors of the Commonwealth Bank of Australia engaged us to perform independent reasonable and limited
assurance engagements, as applicable, in respect of selected Environmental, Social and Governance metrics (the Selected
Sustainability Information), presented on pages 48 to 55 in the Commonwealth Bank of Australia Annual Report for the
year ended 30 June 2024 (the 2024 Annual Report).
Specifically, we were engaged to:
• perform limited assurance on the Selected Sustainability Information, unless otherwise stated, in the 2024 Annual Report
(the ‘Selected Sustainability InformationLA’); and
• perform reasonable assurance on the following Selected Sustainability Information in the 2024 Annual Report (the ‘Selected
Sustainability InformationRA’)
Selected Sustainability InformationRA
Greenhouse gas emissions – Scope 1 emissions (Location-based, Group)
Greenhouse gas emissions – Scope 2 emissions (Location-based, Group)
Greenhouse gas emissions – Scope 1 and 2 emissions (Location-based, Australia)
Greenhouse gas emissions – Scope 1 and 2 emissions (Location-based, New Zealand)
Total energy consumption – Australia (Total fuel consumption, Electricity consumption,
Total energy consumption incl. fuel and electricity)
as at 30 June 2024 and the year/ period then ended, or as otherwise specified in the Selected Sustainability Information
set out on pages 48 to 55 in the 2024 Annual Report.
Selected Sustainability Information and Criteria
The Criteria used by the Group to prepare the Selected Sustainability Information is set out within the Glossary on pages
312 to 327 in the 2024 Annual Report (the ‘Criteria’). Specifically, the Criteria is identified within the Glossary by way of the
following sentence: This is the Criteria for the accompanying Selected Sustainability Information, assured by PwC to a limited or
reasonable assurance level.
We assessed the Selected Sustainability Information against the Criteria. The Selected Sustainability Information needs
to be read and understood together with the Criteria, as at 30 June 2024 and the year/ period then ended, or as otherwise
specified in the Selected Sustainability Information set out on pages 48 to 55 in the 2024 Annual Report.
Our assurance conclusion and opinion are with respect to the Selected Sustainability Information as at 30 June 2024 and/or
for the year/period then ended (unless otherwise stated), and does not extend to information in respect of earlier periods
or to any other information included in, or linked from, the 2024 Annual Report.
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo NSW 2000, GPO BOX 2650 Sydney NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
56
OUR COMMITMENT TO SUSTAINABILITY
Responsibilities of Management
Management of the Group is responsible for the preparation of the Selected Sustainability Information in accordance with
the Criteria. This responsibility includes:
• determining appropriate reporting topics and selecting or establishing suitable criteria for measuring, evaluating and
preparing the underlying Selected Sustainability Information;
• ensuring that those Criteria are relevant and appropriate to the Group and the intended users; and
• designing, implementing and maintaining systems, processes and internal controls relevant to the evaluation, measurement
and preparation of the Selected Sustainability Information which is free from material misstatement, whether due to fraud
or error, against the Criteria.
The maintenance and integrity of the Group’s website is the responsibility of the Group’s management; the work carried out
by us does not involve consideration of these matters and, accordingly, we accept no responsibility for any changes that may
have occurred to the reported Selected Sustainability Information or Criteria when presented on the Group’s website.
Our independence and quality management
We have complied with the ethical requirements of the Accounting Professional and Ethical Standard Board’s APES 110
Code of Ethics for Professional Accountants (including Independence Standards) relevant to assurance engagements,
which are founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality,
and professional behaviour.
Our firm applies Australian Standard on Quality Management ASQM 1, Quality Management for Firms that Perform Audits
or Reviews of Financial Reports and Other Financial Information, or Other Assurance or Related Services Engagements,
which requires the firm to design, implement and operate a system of quality management including policies or procedures
regarding compliance with ethical requirements, professional standards, and applicable legal and regulatory requirements.
Our responsibilities
Selected Sustainability InformationLA
Our responsibility is to express a conclusion on Selected Sustainability InformationLA, based on the limited assurance
procedures we have performed and the evidence we have obtained.
Our engagement has been conducted in accordance with the Australian Standard on Assurance Engagements (ASAE 3000)
Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and ASAE 3410 Assurance
Engagements on Greenhouse Gas Statements. Those standards require that we plan and perform this engagement to obtain
limited assurance about whether anything has come to our attention that causes us to believe that the Selected Sustainability
InformationLA has not been prepared, in all material respects, in accordance with the Criteria, as at 30 June 2024 and the year/
period then ended (unless otherwise stated).
The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for,
a reasonable assurance engagement and consequently the level of assurance obtained in a limited assurance engagement
is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been
performed. Accordingly, we do not express a reasonable assurance opinion.
The procedures we performed in carrying out our limited assurance in respect of the Selected Sustainability InformationLA
were based on our professional judgment and included:
• Reading the Selected Sustainability Information to determine whether it is in line with our overall knowledge of, and
experience with, the Sustainability performance;
• Performing enquiries with respect to capturing, collating, calculating and reporting the Selected Sustainability Information;
• Assessing the appropriateness of selected estimates, assumptions and methodologies applied by management in the
preparation of the Selected Sustainability Information;
• Calculating the arithmetic accuracy of a sample of calculations of the Selected Sustainability Information;
• Undertaking analytical procedures over the performance data utilised within the calculations and preparation of the
Selected Sustainability Information; and
• Comparing the Selected Sustainability Information to relevant underlying sources on a sample basis.
57
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our limited assurance conclusion.
The Selected Sustainability InformationLA includes a deduction from Group’s emissions for the year of 500 tonnes of CO2-e
relating to offsets. We have performed procedures as to whether these offsets were acquired during the year (or when actual
emissions are unknown before the year end, until the issuance of the assurance report post year-end) and arrangements
are in place for their surrender, as well as perform procedures over the calculation of net emissions. We have not, however,
performed any procedures regarding the external providers of these offsets, and express no conclusion about whether the
offsets have resulted, or will result, in a reduction of 500 tonnes of CO2-e.
Selected Sustainability InformationRA
Our responsibility is to express an opinion on the Selected Sustainability InformationRA based on the procedures we have
performed and the evidence we have obtained. We have conducted our reasonable assurance in accordance with the
Australian Standard on Assurance Engagements (ASAE) 3000 Assurance Engagements Other Than Audits or Reviews
of Historical Financial Information and ASAE 3410 Assurance Engagements on Greenhouse Gas Statements. Those standards
require that we plan and perform this engagement to obtain reasonable assurance about whether the Selected Sustainability
InformationRA has been prepared, in all material respects, in accordance with the Criteria, as at 30 June 2024 and for the
year/period then ended (unless otherwise stated).
A reasonable assurance engagement involves performing procedures to obtain evidence about the Selected Sustainability
InformationRA. The nature, timing and extent of procedures selected depend on professional judgement, including the
assessment of risks of material misstatement, whether due to fraud or error, in the Selected Sustainability InformationRA.
In making those risk assessments, we considered internal control relevant to the Group’s preparation of the Group’s Selected
Sustainability InformationRA. Our reasonable assurance engagement also included:
• Evaluating the design and implementation of controls relevant to the Selected Sustainability InformationRA;
• Performing procedures on location at the Group’s significant facilities on a sample basis; and
• Use of larger sample sizes for substantive procedures undertaken on a sample basis.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our reasonable assurance opinion.
Inherent limitations
Inherent limitations exist in all assurance engagements due to the selective testing of the information being examined.
It is therefore possible that fraud, error, or non-compliance may occur and not be detected.
A reasonable or limited assurance engagement is not designed to detect all misstatements in the Selected Sustainability
Information or instances of non-compliance of the Selected Sustainability Information with the Criteria, as a limited assurance
engagement is limited primarily to making enquiries of the Group’s management and applying analytical procedures; and
limited/reasonable assurance engagement procedures are not performed continuously throughout the period and procedures
are undertaken on a test basis.
Additionally, non-financial data may be subject to more inherent limitations than financial data, given both its nature and the
methods used for determining, calculating, and estimating such data. The precision of different measurement techniques may
also vary. The absence of a significant body of established practice on which to draw to evaluate and measure non-financial
information allows for different, but acceptable, evaluation and measurement techniques that can affect comparability
between entities and over time. In addition, greenhouse gas quantification is subject to inherent uncertainty because
of evolving knowledge and information used in estimating emissions factors and the values needed to combine emissions
of different gases.
The assurance conclusion and opinion expressed in this report have been formed on the above basis.
Limited assurance conclusion
Based on the procedures we have performed, as described under ‘Our responsibilities’ and the evidence we have obtained,
nothing has come to our attention that causes us to believe that the Selected Sustainability InformationLA has not been
prepared, in all material respects, in accordance with the Criteria as at 30 June 2024 and the year/ period then ended,
or as otherwise specified in the Selected Sustainability Information set out on pages 48 to 55 in the 2024 Annual Report.
58
OUR COMMITMENT TO SUSTAINABILITY
Emphasis of matter – Estimation of ‘Selected Scope 3 emissions’
The estimation of ‘Selected Scope 3 emissions’ reported by the Group comprises selected sources of operational Scope 3
emissions only.
We draw attention to the Glossary of terms on pages 312 to 327 in the 2024 Annual Report which sets out these assumptions
and data sources for different Scope 3 emissions sources. Our conclusion is not modified in respect of this matter.
Reasonable assurance opinion
In our opinion, in all material respects, the Group has prepared the Selected Sustainability InformationRA, in accordance with
the Criteria as at 30 June 2024 and the year/period then ended, or as otherwise specified in the Selected Sustainability
Information set out on pages 48 to 55 in the 2024 Annual Report.
Use and distribution of our report
We were engaged by the Board of Directors of the Commonwealth Bank of Australia to prepare this independent assurance
report having regard to the criteria specified by the Group and set out in this report. This report was prepared solely for the
Directors of the Commonwealth Bank of Australia for the purpose of providing limited or reasonable assurance, as applicable,
in respect of the Selected Sustainability Information as at 30 June 2024 and the period/year then ended (unless otherwise
stated) within the 2024 Annual Report and may not be suitable for any other purpose.
We accept no duty, responsibility, or liability to anyone other than the Group in connection with this report or to the Group
for the consequences of using or relying on it for a purpose other than that referred to above. We make no representation
concerning the appropriateness of this report for anyone other than the Group and if anyone other than the Group chooses
to use or rely on it, they do so at their own risk.
This disclaimer applies to the maximum extent permitted by law and, without limitation, to liability arising in negligence
or under statute and even if we consent to anyone other than the Group receiving or using this report.
PricewaterhouseCoopers
Elizabeth O’Brien
Sydney
Partner
14 August 2024
59
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Financial
performance
1
Our continued focus on supporting customers,
disciplined operational and strategic execution
has delivered solid financial performance
for the 2024 financial year.
Common Equity Tier 1 capital ratio
12.3%
APRA (Level 2)
10bpts on FY23
The Group returned $8 billion to shareholders through dividends
and buy-backs and remains in a strong capital position, well
in excess of the minimum regulatory requirements.
Net profit after tax
$9,481m
Statutory NPAT
6% on FY23
$9,836m
Cash NPAT
2% on FY23
Net profit after tax (NPAT) was supported by volume growth
in core businesses. The reduction in NPAT was driven by the
impact of inflationary increases in our operating expenses,
partly offset by lower loan impairment expense.
Loan impairment and credit provisions
$802m
28% on FY23
1.66%
Provision coverage ratio 3
Loan impairment expense decreased reflecting our robust credit
origination and underwriting practices, rising house prices and
customer resilience in the face of higher interest rates.
We maintained a strong provision coverage ratio of 1.66%
reflecting our cautious approach to managing risks while the
level of uncertainty in the economic outlook remains high.
Net interest margin (NIM)
1.99%
8bpts on FY23
Group NIM decreased driven by intense competition for home
loans and customers switching to higher yield term deposits.
Dividend
$4.65
Per share, fully franked
3% on FY23
The full year dividend was supported by the Group’s continued
strong operational and financial performance. The final dividend
was $2.50 per share, fully franked. The interim dividend was
$2.15 per share, fully franked.
1 All information in this section is presented on a continuing operations basis, unless stated otherwise. Comparative information has been restated.
For further details refer to Note 1.1 in the Financial report on pages 143–145.
2 As reported in RBA Lending and Credit Aggregates (Home Lending and Business Lending) and APRA Monthly ADI Statistics (Household Deposits).
CBA Business Lending multiple estimate is based on Business Banking growth rate (excluding Institutional Banking and Markets) over published
APRA Total Business Lending Data (excluding estimated Institutional Lending balances).
3 Total provisions as a percentage of credit risk weighted assets.
Volume growth in core business 2
1.2 system
+$11.6bn
+$14.5bn
+$19.9bn
0.5 system
0.8 system
Business lending
Household deposits
Home lending
60
FINANCIAL PERFORMANCE
Delivering for shareholders
Many Australians rely on the dividends and related franking credits that they receive to support
their income. We aim to deliver sustainable dividends for our 830,000 shareholders. By maintaining
strong organic performance and prudent balance sheet settings, we are able to fund balance sheet
growth, invest for the future and pay a sustainable dividend over the long term. We have increased
our dividend payout ratio benefitting more than 13 million Australians who own CBA shares directly
or through their superannuation holding.
Dividends
The final dividend of $2.50 per share reflects the Bank’s strong capital position.
Our aim is to deliver sector-leading returns and a sustainable dividend. To deliver
sustainable dividends we seek to:
• Generate organic capital through cash NPAT;
• Target a full-year payout ratio of 70-80% of cash NPAT; and
• Maximise the use of our franking account by paying fully franked dividends.
The final dividend payout ratio was 79% of the Bank’s cash earnings for the
full financial year. Including the interim dividend of $2.15 per share, the full year
dividend was $4.65 per share, fully franked.
The Dividend Reinvestment Plan (DRP) continues to be offered to shareholders.
No discount will be applied to shares allocated under the plan for the final dividend.
The DRP is anticipated to be satisfied in full by an on-market purchase of shares.
Dividend per share (cents)
552.4
587.8
596.1
FY24
FY23
FY22
12.6
13.9
13.6
FY24
FY23
FY22
Total shareholder return (TSR)
(%)
Return on equity (ROE)
Cash, continuing operations (%)
Earnings per share (EPS)
Cash, continuing operations (cents)
TSR combines both share price
appreciation and dividends
paid. It shows the total return
to shareholders over time.
ROE measures the Bank’s profitability.
It represents the net profit generated
as a percentage of the equity
shareholders have invested.
EPS measures the Bank’s earnings
growth. It is calculated by dividing
net profit after tax by the number
of shares on issue.
830,000+
shareholders hold CBA
shares directly, over
13 million hold CBA
shares through their
superannuation
76%
Australian ownership
49%
direct ownership by retail
shareholders
$8bn
returned to shareholders
as dividends and share
buy‑backs during FY24
$3,618
dividend amount related
to FY24 for the average
retail shareholder
FY24
FY23
FY22
FY21
FY20
FY19
FY18
FY17
FY16
FY15
198
198
199
200
200
200
150
222
222
230
231
231
98
175
210
420
420
429
431
431
298
200
350
385
210
240
450
215
250
465
Interim
Final
44
90
42
154
66
36
10yr
5yr
1yr
CBA
Peer average (ex. CBA)
61
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Cash NPAT
$9,836m
FY23 $10,072m
Statutory NPAT
$9,481m
FY23 $10,096m
Group financial performance
Our result reflects our customer focus and disciplined strategic and operational
execution. We have continued to profitably grow business lending, home
lending and deposits, while managing our costs in an inflationary environment.
Group profit
Cash NPAT decreased 2% reflecting
the impact of inflation on operating
expenses, partly offset by lower loan
impairment expense.
Cash NPAT is management’s preferred
measure of the Group’s financial
performance. It excludes non-cash items
that are non-recurring in nature and not
considered representative of the Group’s
ongoing financial performance.
Statutory NPAT includes non-cash items.
For details and a reconciliation between
statutory and cash NPAT, refer to page 98 in the
Directors’ report.
Net interest income decreased 1%, driven
by lower net interest margin, partly offset by
volume growth in home and business lending.
Net interest margin (NIM) is an important
measure of our financial performance.
It represents the return on our interest
earning assets (e.g. home loans) after
accounting for the costs of funding these
assets (e.g. deposits).
NIM decreased 8 basis points primarily
driven by intense competition for home loans
and customers switching to higher yielding
term deposits.
Other operating income increased 7%.
The key drivers were:
• Increased foreign exchange and cards
income due to higher transaction volumes;
• Higher retail, business and institutional
lending fee income driven by lending
volume growth; and
• Improved markets trading income.
Partly offset by:
• Lower equities income due to reduced
trading volumes.
Operating income
Operating income
Cash basis
$27,174m
FY23 $27,135m
Net interest margin
1.99%
FY23 2.07%
FY24
FY23
% change
Net interest income
22,824
23,056
1%
Other operating income
4,350
4,079
7%
Total operating income
27,174
27,135
–
Operating expenses
(12,218)
(11,858)
3%
Loan impairment expense
(802)
(1,108)
28%
Net profit before tax
14,154
14,169
–
Tax expense
(4,318)
(4,097)
5%
Net profit after tax – cash basis
9,836
10,072
2%
62
FINANCIAL PERFORMANCE
Operating expenses increased 3%
to $12,218 million in FY24.
Staff costs increased 4% driven by wage
inflation and higher average full-time
equivalent staff.
The staff increases were due to additional
resources for the delivery of our strategic
priorities as we continue to reduce reliance
on external vendors and enhance our internal
technology engineering, fraud and scams
prevention, and cyber security capabilities.
Occupancy and equipment expenses
increased 5% primarily driven by increased
office attendance, relocation costs and inflation.
Information technology expenses
increased 9% primarily due to higher
amortisation, increased software licensing
and infrastructure costs, including increased
cloud computing volumes, and inflation.
Other expenses decreased 1% to
$1,461 million.
For more details on operating expenses
refer to Note 2.4 on pages 156–157 in the
Financial report.
For more details on remediation provisions
refer to Note 7.1 on pages 206–212 in the
Financial report.
Operating expenses
Tax expense
Income tax expense for the year increased 5% mainly due to higher hybrid capital
distributions that are non-deductible for tax purposes. The effective tax rate for the year was
30.5%. This is above the Australian company tax rate of 30% primarily as a result of expenses
non-deductible for tax purposes.
For more details on tax expense refer to Note 2.5 on pages 158–160 in the Financial report.
Operating expenses
Cash basis
$12,218m
FY23 $11,858m
Full-time
equivalent staff
48,887
FY23 49,454
Cost-to-income
ratio
Cash basis
45.0%
FY23 43.7%
Tax expense
Cash basis
$4,318m
FY23 $4,097m
FY24
FY23
% change
Staff costs
7,448
7,177
4%
Occupancy and equipment
995
950
5%
Information technology services
2,225
2,036
9%
Other expenses
1,461
1,483
1%
Underlying operating expenses – cash basis
12,129
11,646
4%
Restructuring and one-off item ¹
89
212
58%
Total operating expenses
12,218
11,858
3%
1 FY24 includes $89 million of restructuring costs. FY23 includes $212 million of restructuring costs and a one-off
regulatory levy provision.
63
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Provisions and credit quality
Consumer arrears show the proportion of our consumer
credit portfolio where customers have fallen behind on
their contractual loan repayments.
Consumer arrears increased reflecting the impact of higher
interest rates and cost of living pressures on household
disposable incomes. Our home lending portfolio remains
well-secured and the majority of home lending customers
remain in advance of scheduled repayments.
Troublesome and impaired assets include loans where
customers are experiencing financial difficulties that could
result in credit losses for the Group and loans to customers
not meeting their repayment obligations such as loans
in default.
The increase in troublesome and impaired assets to
$8,729 million from $7,099 million in FY23, was primarily
driven by downgrades of a small number of single name
exposures across a few sectors and restructures and
arrears in the home lending portfolio. The majority
of impaired home loans are well secured.
Our total impairment provisions remained relatively stable at
$6,135 million increasing slightly from $5,950 million in FY23.
The Group maintains a cautious approach to managing risks,
as the level of uncertainty in the economic outlook remains
high. Provisioning coverage remains strong with the provision
coverage ratio at 1.66%.
Loan impairment reflects changes
in our estimates of expected
loan losses, as well as bad debts
incurred during the year net of
any recoveries. The loan loss rate
measures loan impairment as
a percentage of average gross
loans and acceptances.
Loan impairment expense
decreased 28% reflecting our
robust credit origination and
underwriting practices, rising house
prices and customer resilience
in the face of higher interest rates.
Loan impairment
Portfolio credit quality
Loan impairment provisions
Loan impairment
$802m
FY23 $1,108m
Loan loss rate (bpts) as a percentage
of lending
FY23
FY24
FY22
FY21
FY20
FY19
FY18
FY17
FY16
FY15
FY14
FY13
FY12
20
21
16 16
19
15 15 16
33
7
(4)
12
9
FY24
FY23
FY22
6,403
8,729
Troublesome Impaired
3,452
2,951
4,829
3,900
7,099
3,773
3,326
Troublesome and impaired assets ($m)
Consumer arrears > 90 days (%)
1.02
0.52
1.50
0.74
Home Loans Credit Cards Personal Loans
Jun 24
Jun 23
Jun 22
0.65
1.19
0.55
0.47
0.49
Total impairment provisions ($m)
FY24
FY23
FY22
5,347
5,950
1.63% 1
1.64% 1
6,135
1.66% 1
1 Ratio of total provisions to credit risk weighted assets.
64
FINANCIAL PERFORMANCE
Balance sheet strength
Balance sheet strength is critical to our ability to support our customers, invest for future
and deliver sustainable returns for our shareholders. Our capital, liquidity and funding
metrics remained strong during FY24. The strength of our balance sheet means the Bank
is well positioned to continue supporting our customers and the broader Australian economy
while delivering sustainable returns to our shareholders.
The Group has a strong capital position with
a Common Equity Tier 1 (CET1) capital ratio
of 12.3% as at 30 June 2024, well in excess
of the minimum regulatory requirement
of 10.25%. This represents a $9.8 billion
surplus to the APRA minimum regulatory
requirement.
The Bank’s CET1 ratio was supported
by strong organic capital generation
from earnings.
On 9 August 2023, the Group announced
its intention to undertake a $1 billion
on-market share buy-back. As at 30 June
2024, the Group has successfully completed
$0.3 billion of the buy-back.
The strong capital position and our progress
on executing our strategy means we are well
placed to continue to support our customers,
manage ongoing uncertainties and continue
returning excess capital to shareholders.
The Bank is an Authorised Deposit-taking
Institution (ADI) regulated by APRA.
To ensure banks hold sufficient capital
to protect deposit holders against
unexpected losses, APRA sets minimum
capital requirements for ADIs based on the
Basel Committee on Banking Supervision
guidelines. These requirements influence
the Bank’s ability to pay dividends.
The deposit funding ratio represents the
proportion of total funding made up of
customer deposits. Customer deposits
are considered the most stable source
of funding. The strength of our banking
business has allowed us to maintain the
highest share of stable household deposits
in Australia. Ensuring we are well funded
has been critical to our ability to continue
supporting our customers and helping the
Australian economy recover.
The Group continued to satisfy a significant
portion of its funding requirements
from customer deposits, accounting
for 77% of total funding, with customers
continuing to increase retail and
business deposits.
The liquidity coverage ratio (LCR)
represents the level of high quality liquid
assets available to meet short-term
obligations in a liquidity stress scenario.
The Group’s average LCR for the quarter
ended 30 June 2024 was 136% which was
significantly above the minimum regulatory
requirement of 100%.
The net stable funding ratio (NSFR)
shows to what extent our long term assets
are covered by stable sources of funding.
The Group’s NSFR as at 30 June 2024
was 116% remaining well above the
regulatory minimum of 100%.
Capital
Funding and liquidity
Common Equity
Tier 1 capital ratio
12.3%
APRA (Level 2)
FY23 12.2%
Deposit
funding ratio
77%
FY23 75%
Liquidity
coverage ratio
136%
FY23 131%
Net stable
funding ratio
116%
FY23 124%
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COMMONWEALTH BANK
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FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Business unit performance
Retail Banking Services
Brands
Cash NPAT
$5,355m
FY23 $5,581m
Contribution
to Group profit
54%
Net interest margin
2.51%
FY23 2.70%
Retail Banking Services (RBS) provides simple and convenient
banking products and services to personal and private bank
customers, helping them manage their everyday banking needs, buy
a home, or invest for the future. RBS also includes the retail banking
activities conducted under the Bankwest and Unloan brands.
Financial performance 1
Cash net profit after tax was $5,355 million, a decrease of $226 million or 4%
on FY23. The result was driven by lower total operating income, an increase in
operating expenses and a reduction in loan impairment expense. Total operating
income reduced $380 million or 3% reflecting lower home lending, deposit and
consumer finance margins mainly due to competition, partly offset by volume
growth in lending and deposits, and higher earnings on equity. Operating expenses
increased $187 million or 4%, driven by inflation, higher staff cost from investment
in contact centre and scams management resources, higher amortisation and
technology spend, partly offset by productivity initiatives including workforce and
branch optimisation. Investment spend focused on product and service innovation,
digital enhancements, the CommBank Yello loyalty program, home buying process
optimisation, reducing scam losses and complying with regulations including Open
Banking. Loan impairment expense decreased $270 million or 46% due to rising
house prices and lower expected losses within consumer finance, partly offset by
ongoing cost of living pressures.
Operating performance
RBS’ strategy remains focused on deepening and broadening our customer
relationships with distinct and differentiated propositions, giving customers more
reasons to bank with us.
Our Main Financial Institution (MFI) share increased to 35.5%, remaining at #1.
We also continued to grow our leading MFI share of young adults and migrants.
Our customer advocacy and satisfaction has improved with RBS being #1 in NPS
among the major banks.
Retail transaction accounts have grown by 5% and we have also seen good growth
in household deposits. We continue to focus on disciplined and targeted lending
growth to generate sustainable returns. RBS has maintained leading market share
in home lending and deposits.
We remain focused on supporting our customers, including customers impacted
by fraud and scams, and customers experiencing mortgage stress given the high
interest rate environment. RBS continues to reimagine banking to anticipate
our customers’ needs to deliver more rewarding and personalised experiences.
This included the launch of our new loyalty rewards program, CommBank Yello,
in November 2023 with over 5 million retail customers now actively engaged.
To help customers take advantage of energy efficiency opportunities we offer
a range of products and incentives, including our Green Loan, Green Home Offer
and Personal Loan Offer which can be used to purchase eligible electric or hybrid
vehicles. This year, we introduced InstalPay to help our customers install solar
panels and batteries in their homes.
1 Excludes the General Insurance business which was sold on 30 September 2022.
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FINANCIAL PERFORMANCE
Business Banking
Business Banking (BB) serves the banking needs of business,
corporate and agribusiness customers across the full range of
financial services solutions. BB also provides Australia’s leading
equities trading and margin lending services through our
CommSec business. BB includes the financial results of business
banking activities conducted under the Bankwest brand.
Financial performance
Cash net profit after tax was $3,774 million, an increase of $150 million or 4%
on FY23. The result was driven by higher total operating income and a reduction
in loan impairment expense, partly offset by an increase in operating expenses.
Total operating income increased $296 million or 4% reflecting improved deposit
margins and earnings on equity from the rising rate environment and continued
lending volume growth, partly offset by lower lending margins reflecting
competitive pricing. Operating expenses increased $137 million or 5% driven
by inflation and higher technology spend, additional customer facing staff and
investment in product offerings. Investment spend primarily focused on further
enhancing customer experience through reimagining products and services, system
modernisation, digitisation and automation. Loan impairment expense decreased
$55 million or 11% due to lower specific provisions charges, partly offset by higher
collective provisions. Provision coverage remains above pre-COVID levels reflecting
the impact of higher interest rates and ongoing inflationary pressures.
Operating performance
BB is Australia's leading business banking franchise with one in four businesses calling
us their main financial institution. Our strategy aims to build deeper relationships with
our customers through the strength of our transaction banking offering.
Our MFI share increased to 25.5% and our leading deposit market share
demonstrates the strength of the franchise. The Business NPS ranking remained
strong through the year. We continue to focus on differentiating and improving
customer experience, supporting Australian businesses, offering innovative
products and services, and creating superior digital experiences.
We now have 1.25 million transaction accounts, growing by 9% this year. BB
delivered strong performance with business lending growth of 11% or $14.7 billion
across key sectors. We have a strong deposit funding ratio of around 90%.
Our focus is on deepening customer relationships from our lead in transaction
banking. With tailored offerings such as our Smart payments solutions (e.g. in
Health, Hospitality, and Real Estate), over 90% of business loans are attached to
a transaction banking relationship. Additionally, we enable flexible access to capital
through short-notice interest-earning accounts (including the new Flexi Business
Investment Account), as well as working capital solutions such as Stream.
To support customers transition their business in line with Australia’s climate
ambitions, we offer a range of products and services that can support and
incentivise our customers, including our Business Green Loan and Green Vehicle
and Equipment Finance. Our Green Buildings Tool helps business customers
identify actions they could take to improve energy efficiency and reduce the
emissions of their commercial buildings. In addition, the Sustainability Action Tool,
available through Netbank, CommBank app, and CBA website, surfaces relevant
actions and resources on sustainability to small and medium businesses.
Cash NPAT
$3,774m
FY23 $3,624
Contribution
to Group profit
38%
Net interest margin
3.43%
FY23 3.53%
Brands
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COMMONWEALTH BANK
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FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Institutional Banking and Markets
Cash NPAT
$1,097m
FY23 $1,048m
Contribution
to Group profit
11%
Net interest margin 1
1.62%
FY23 1.44%
Institutional Banking and Markets (IB&M) provides domestic
and global financing and banking services to large corporate,
institutional and government clients. This includes access to
debt capital markets, risk management, transaction banking,
sustainable finance, structured and working capital solutions,
and tailored research and data analytics.
Financial performance
Cash net profit after tax was $1,097 million, an increase of $49 million or 5% on
FY23. The result was driven by an increase in total operating income, partly offset
by higher operating expenses and a reduction in loan impairment benefit. Total
operating income increased $82 million or 3% driven by higher earnings on deposits
and equity, increased sales volumes in fixed income, and higher fees from increased
volume of lending facilities, partly offset by lower institutional lending and leasing
margins, lower fixed income and rates trading income, and non-recurrence of
prior year gains from asset sales in Structured Asset Finance. Operating expenses
rose $32 million or 3% due to inflation, investment in business and operations
resources and volume driven operations costs, partly offset by lower technology
costs and productivity initiatives. Investment spend primarily focused on strategic
initiatives and continuing to strengthen operational risk, compliance and regulatory
frameworks. Higher collective provisions contributed to a $32 million decrease
in loan impairment benefit, as forward looking adjustments and non-recurrence
of prior year provision releases were partly offset by higher write-backs,
recoveries and lower individual provisions for single name exposures.
Operating performance
IB&M plays an important role as a source of funding for the Group, with a strategy
focused on deepening relationships with large corporate, institutional and
government clients.
Excluding the impact of pooled facilities, lending volumes have increased driven
by growth in the asset backed lending portfolio while maintaining an efficient risk
weighted assets profile. Lending margins remain under pressure due to the higher
funding cost environment. Deposit balances have increased driven by transaction
and saving deposits with margins benefiting from the higher rate environment.
With stable investment deposits, IB&M now contributes around $66 billion
of net deposit funding to the Group.
Markets revenue, excluding derivative valuation adjustments, was slightly lower,
mainly in fixed income driven by lower trading gains partially offset by higher sales
volumes, with a stable performance in the commodities and carbon business.
IB&M continued to focus on building Australia’s future economy and supporting
our clients’ transition to net zero. This included assisting in 82 sustainable finance
transactions across loans and bonds this year, as well as deepening our involvement
in key global carbon markets through investment and strategic partnerships, with
the aim of supporting Australia’s voluntary carbon market and our clients in line
with IB&M’s strategy.
Brands
1 Net interest margin in Institutional Banking and Markets excludes Markets.
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FINANCIAL PERFORMANCE
New Zealand
New Zealand includes the businesses operating under the ASB
brand. ASB is dedicated to accelerating progress for all New
Zealanders. We provide everyday banking, lending, insurance
and wealth management products and services to individuals
and businesses across the country.
Financial performance
Cash net profit after tax was $1,194 million, a decrease of $126 million or
10% on FY23. Total operating income decreased $116 million or 4% driven
by a decrease in net interest margin. Operating expenses increased $49 million
or 4% reflecting higher technology costs from increased software licensing and
amortisation, wage inflation and increased costs to prevent fraud and scams,
and enhance our financial crime capability. Investment spend continues to
focus on regulatory compliance, customer experience initiatives and enhancing
technology platforms. Loan impairment expense increased $5 million or 8% driven
by higher individually assessed provisions in the business portfolio and write-offs
in the consumer finance portfolio.
Operating performance
ASB home and business & rural lending grew by 1% in a competitive, low growth
New Zealand market, while deposits grew by 5% as customers took advantage
of higher yielding term deposits.
While deposit customers continue to benefit from higher interest rates in
New Zealand, it is a challenging environment for borrowers and ASB has been
proactively reaching out to business and personal lending customers to provide
support. The vast majority are still managing well.
ASB has established a range of initiatives this year to help improve New Zealand’s
productivity and support social and environmental transformation. This included
an Accelerated Housing Fund to support affordable, social and Māori housing
development, ASB Access to help supercharge high potential food and fibre
exporters, and lending for initiatives to improve business productivity.
ASB entered into a partnership with Rewiring Aotearoa to investigate barriers and
opportunities around the conversion of NZ homes and farms to renewable energy.
Additionally, it launched a Clean Tech Fund for early-stage companies focused
on reducing emissions and improving use of natural resources, and invested in
AgriZeroNZ to help farmers reduce agricultural emissions and ensure the future
competitiveness and profitability of the industry.
ASB continues to invest in preventing fraud and scams. In FY24 ASB invested
almost $100 million to protect customers against fraud, scams, financial and
cyber crime. ASB launched a 24/7 fraud and scams phone line for customers,
and is investing in an ongoing campaign to upskill all New Zealanders about
fraud and scams.
Brands
Cash NPAT
$1,194m
FY23 $1,320m
Contribution
to Group profit
12%
Net interest margin 1
2.23%
FY23 2.39%
1 Net interest margin is ASB Bank only and is calculated in New Zealand dollar.
69
COMMONWEALTH BANK
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FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Effective risk management enables us to fulfil our purpose
of building a brighter future for all. From helping people
buy a home or start and grow a business, we take risks
we understand and can manage, to support our customers
in achieving their goals. We need to be adaptive to the
changing landscape of threats and opportunities and
take the right risks, with a strong emphasis on customer
outcomes, resilience, security and safety.
CBA’s embedded Risk Management Framework (RMF),
together with a strong culture and Code of Conduct,
empowers our people to confidently manage risks
and opportunities. This enables the Board, Executive
Leadership Team (ELT) and our people to make informed
risk decisions that support the delivery of our strategy
and better customer outcomes, within risk appetite.
Effective risk management is about
understanding different perspectives
and using appropriate judgement,
to make risk decisions that deliver
better outcomes for customers
and the community.
Managing
our risks
70
MANAGING OUR RISKS
Key considerations for risk this year:
Macroeconomic uncertainty and
cost of living pressures
The Bank’s financial performance is closely linked
to local and global economic performance. Economic
growth in Australia has slowed over the past year
and is at its weakest rate in 30 years, outside of the
COVID-19 pandemic. However, unemployment
remains well below pre-pandemic levels. The higher
interest rate environment combined with inflationary
pressures has increased stress for some households
while others are lowering spending and saving
to manage pressures. Limited housing supply and
strong demand is pushing up home and rental prices,
creating more challenges for younger Australians and
renters. We must carefully manage capital and credit
settings to continue supporting our customers and
the economy.
Escalating fraud, scams
and cybercrime
Fraud, scams and cybercrime continue to cause
significant harm to Australians, with the number
of scam reports increasing by 18.5% in 2023. Rapid
advances in new technologies including AI, continue
to affect the threat landscape, leading to persistent
targeting of individuals and organisations of all sizes.
While scam losses in Australia decreased from
$3.1 billion in 2022 to just over $2.7 billion in 2023,
anti-scam efforts across governments, regulators,
digital platforms, telcos, banks and other industries
need to continue, to better protect Australians. We
continue to invest in technology capabilities to detect,
prevent and respond to fraud and scams. We are
focused on proactive collaboration with industry and
government partners, to increase national resilience
and further reduce the impact of fraud, scams and
cyber attacks on customers and the community.
Environmental and social expectations
Decarbonising Australia's electricity grid remains
the priority step needed to achieve Australia's and
the Bank's emissions targets. CBA plays a role
in helping our customers transition to a net zero
future and to build resilience to climate change
impacts. The transition, and increasingly frequent
and severe weather events, is expected to impact
the livelihoods and wealth equality of Australians
in some regions. This is potentially heightened by
declining insurance affordability, high energy prices
and expected job losses in regions reliant on fossil
fuels. We are committed to engaging with government
and communities on solutions that support
an inclusive transition.
Increasingly complex geopolitical
environment
Conflicts in Europe and the Middle East have led
to increased market volatility, with the US election
expected to deliver further policy uncertainty.
Competition between the US and China is challenging
the global financial system, creating disruption
to cross-border allocation of capital, payment
systems, critical minerals and technology standards.
Australia's banking system capital and liquidity
requirements and CBA’s prudent capital management
help us to manage financial risks from geopolitical
instability, and continue to support customers and
the Australian economy. CBA focuses on responses
to disruption events, including those that impact third
party providers, to maintain appropriate resilience
of critical operations. This includes building internal
capabilities and participating in Australian government
initiatives to strengthen national critical infrastructure,
digital identities, security and resilience.
Competition intensity
Competition remains from both existing and new
competitors, including non-traditional competitors.
In payments, digital wallets are continuing to grow
rapidly in customer uptake and breadth of services.
Maintaining our leading main financial institution
positions, requires us to continue delivering superior
customer experiences, including personalised digital
offerings, while maximising the value of local branches
and contact centres.
Capability and culture
The progression of technologies including AI, changing
customer expectations and rapidly evolving risks
require leaders, employees and partners with new
and different skill sets. These include engineering,
technology, environment, data and analytics.
We continue to upskill our people with the most
relevant skills and recruit to enhance our capabilities.
In recent years, we have transformed our culture
to take measured risks we understand and can
manage, ask ‘Should We?’ when making decisions,
and challenge the status quo to prioritise better
outcomes for our customers.
The Bank’s operating environment is varied and dynamic.
This introduces new risks and opportunities and affects
our risk priorities.
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COMMONWEALTH BANK
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ADDITIONAL INFORMATION
OVERVIEW
Risk
governance
and reporting
Risk
accountabilities
and skills
Risk
infrastructure
Risk policies
and
procedures
Risk culture
Our risk culture reflects beliefs and behaviours within the Bank that determine how
risks are identified, measured, governed and acted upon. To maintain and improve
our risk culture, CBA conducts a series of assessment and response mechanisms.
These include the Board risk culture assessment, where the Board and senior
management form a view of the Bank’s risk culture; the Group risk culture response
plan, to address identified focus areas and business unit risk culture self-reflections,
where leadership teams identify and prioritise focus areas to improve risk culture.
Our approach to risk
Risk framework enablers
The risk framework enablers allow us to effectively identify,
assess, record, manage and monitor our material risks.
Our RMF comprises the systems,
structures, policies, processes
and people that identify, measure,
evaluate, monitor, report
and control or mitigate both
internal and external sources
of material risk, within
the Board-approved Risk
Appetite Statement (RAS).
The RAS sets the level
of risk the Bank must
operate within to deliver
our strategy. The RMF
includes material risks we
must monitor and manage,
and outlines our approach
to assessing emerging risks.
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MANAGING OUR RISKS
Risk policies
and procedures
Our risk policies and procedures outline
the principles and practices to be used in
identifying and assessing our material risks, and
translate the RAS into our daily business activities.
Risk governance and reporting
The Board provides the highest level of the Bank’s risk
governance and is ultimately responsible for the oversight and
operation of the RMF by management. Supporting the Board
are the Risk and Compliance, Audit, Nominations, and People and
Remuneration Committees, as well as specific management committees
overseeing material risks. Regular management information is provided
which allows material risk positions to be monitored against the RAS
and policy limits.
Risk accountabilities and skills
The Three Lines of Accountability model organises our accountabilities
to manage the Bank’s risks through separation of roles from those that
own and manage the risks; develop risk frameworks and the RAS; and
provide independent assurance over how effectively risks are being
managed. The Three Lines of Accountability includes skilled
employees within each line and is also supported by risk
capability, performance and remuneration frameworks.
Risk infrastructure
Our risk infrastructure provides
the systems, tools, models and
data required for the effective
management of our
material risks.
For more detailed information on the Group RMF
and risk types, refer to Note 9 in the Financial
report on pages 223–264.
Stress testing
Stress testing is an important risk
management tool that is integrated
across the organisation. Stress testing
enables the Board and senior management
to better understand, quantify and
manage risks. It informs how we may
respond to risk events occurring, and
any potential weaknesses in our actions
during a crisis. The results of these tests
are important in strengthening our risk
management approaches. Stress testing
results also inform our risk appetite and
aid us in identifying the acceptable levels
of risk we will assume in our operations.
During 2024, CBA performed stress testing
on different economic and idiosyncratic
scenarios to assess and inform capital
and liquidity management. The results
highlighted the resilience of the Bank’s
balance sheet to multiple adverse scenarios.
CBA also performs targeted stress testing
across credit risk portfolios, liquidity cash
flows, market risk, operational risk events
and climate scenarios.
Setting our risk appetite
CBA is committed to establishing
a culture of disciplined risk management,
and our RAS sets the foundation and
expectations to deliver long-term value
for our customers, people, communities
and shareholders.
The RAS is reviewed and approved
annually by the Board in line with
operating context, and adapted
to new and changing risks present
in our operations. This year, in response
to the risks and opportunities of
AI, a new appetite measure was
introduced to provide transparency
and governance of the Bank’s use of
AI. The Board-approved RAS helps
embed a culture focused on disciplined
risk management that enables smart
risk taking. The RAS also includes key
risk indicators for our material risks,
which provide signals for building
levels of risk, encourage management
to take action and avoid a breach
of appetite. In addition to governance
of RAS performance through Board
and management level committees, our
Group policies, procedures, delegation
and limits translate and embed the RAS
into our daily business activities.
73
COMMONWEALTH BANK
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ADDITIONAL INFORMATION
OVERVIEW
Our risk types
The Bank is exposed to many risks through our products and services.
We categorise these into underlying risk types – strategic, financial and
non-financial risks – based on the nature of their impacts. The Board
approves the risk types of the RMF, which establishes the risks that
require management and control processes.
Risk types
Our material risks are those the Bank is placing extra focus on mitigating, due to their potential to materially
impact the Bank, our customers, shareholders and the community, now or in the future.
▶ Financial risk (including credit,
market and liquidity risks)
▶ Cyber security
▶ Fraud and scams
▶ Environmental and social
▶ Capability and culture
▶ Privacy and data management
▶ Artificial intelligence
▶ Financial crime compliance
▶ Business disruption
▶ Regulatory compliance
Material risks
Financial
Risks arising from
financial transactions
the Bank is exposed
to through customer
credit products,
changes in market
rates or prices, or the
inability to meet our
financial obligations
when they fall due.
Credit risks
• Non-retail credit
• Retail credit
Market risks
• Non-traded market
• Traded market
Liquidity risks
Non-financial
Risks arising from inadequate or failed
internal processes, people or systems,
including the failure to act in accordance
with laws and regulations.
Compliance Risks
• Conduct
• Financial crime
compliance
• Privacy
• Regulation
and licensing
Operational risks
• Accounting and Tax
• Artificial
intelligence
• Business disruption
• Cyber security
• Data management
• Fraud and scams
• Legal
• Model
• People
• Third parties
• Transaction
processing
• Technology
Strategic
Risks related to
value destruction
or less-than-planned
value creation, due to
changes in the internal
or external operating
environment, such as
emerging technologies,
macroeconomic
conditions, the
regulatory or political
environment and
changes in societal
expectations.
• Capability
and culture
• Capital adequacy
• Environmental
and social
• Reputation
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MANAGING OUR RISKS
Our emerging risks
We look ahead to consider risks that may challenge us in the future and
to uphold the risk management standards expected by our customers,
communities and shareholders.
Emerging risks are risks that newly develop, or which
exist but are constantly evolving, with the potential
to impact the Bank and our customers in the medium
to longer term (>12 months), but require action now
to minimise their future impact. Emerging risks are
most often driven by new trends in our operating
environment, such as competition, new technologies
or evolving customer expectations.
Our emerging risk profile is updated annually through
a qualitative and quantitative review process with the
ELT and the Board, and is aligned with the annual
review of the Group's Strategy. The emerging risk profile
also assesses the adequacy of the Bank’s mitigating
strategies to prevent these emerging risks from
materially impacting the Bank. Where we may have
limited ability to influence certain emerging risks, it may
be more challenging to implement mitigating actions.
Key emerging risk themes
Macroeconomic
Geopolitical tensions and conflict
Macroeconomic uncertainty
Political and regulatory
Accelerated regulatory reform
Competition
Business model disruption from competitors
Financial system disruption from other competitors
Tokenisation, blockchain and stablecoins
Technology, workforce and resilience
Cloud migration
Future skills competition
Generative AI
Growing sophistication of cyber threats
Quantum computing
Customer expectations
Business model disruption from societal expectations
Housing affordability
Environmental
Australian energy transition
Financial impacts of extreme weather events
Societal impacts of extreme weather events
Social
Human rights and modern slavery
New infectious diseases
75
COMMONWEALTH BANK
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OVERVIEW
Our material risks
Our material risks are those the Bank is placing extra focus on mitigating, due to their potential to
materially impact the Bank, our customers, shareholders and the community, now and in the future.
Risk context
Our response
Financial risk
Risk type:
Material themes:
Macroeconomic pressures and the
rising cost of living could negatively
impact financial risk. The slowdown
in economic growth could lead
to market volatility, increased
unemployment and an increase
in the number of borrowers’
unable to meet their financial
commitments with the Bank.
• Credit settings, pricing and the credit profile of our
customers are routinely assessed in light of changing
and emerging risks. Our loan loss provisions are carefully
managed to help ensure provisions are appropriate.
• We help ensure that the Bank’s balance sheet settings
remain conservative, with a high proportion of funding
from customer deposits and excess liquidity. We perform
stress tests to help ensure we are well prepared for a range
of economic scenarios.
Learn more about how we are supporting our customers
on pages 36–41.
Learn more about our financial risk management on pages 223–264
of Note 9 in the Financial report.
Cyber security
Risk type:
Material themes:
Cyber attacks continue to pose
a significant threat of disruption
and loss of confidential data.
These attacks have grown in both
severity and frequency, driven
by high-value targets and new
technologies available to cyber
criminals. The Bank is acutely aware
of the destabilising impact a cyber
attack could have.
• We invest in people, process and technological capabilities
to help defend our systems against cyber attacks.
• We test ourselves in simulations to help improve the Bank’s
response and recovery capability.
• We remain focused on strengthening system-level
resilience, which includes collaboration with industry bodies
and the Government’s National Office of Cyber Security.
Learn more about our approach to cyber security on page 46.
Fraud and
scams
Risk type:
Material themes:
The acceleration of new
technologies in recent years has
allowed for more innovation and
digitisation, but has also been
used by criminals to perpetrate
increasingly sophisticated fraud
and scams against customers.
• Initiatives across the Bank are focused on enhancing our
ability to detect, prevent and recover losses from fraud
and scams on our customers. Examples of anti-scam
initiatives and features include CallerCheck, NameCheck,
CustomerCheck and our partnership with Telstra to help
protect customers from phone scams and our leading
stance on cryptocurrency safeguards.
• Our CommBank Safe webpage provides education and
awareness tools to help customers protect themselves from
fraud and scams. Research indicates that while Australians
have become more concerned about scams over the past
12 months, over eight in ten people say they are confident
in their ability to recognise a scam.
Learn more about how we are helping customers protect themselves
on page 37.
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MANAGING OUR RISKS
Risk context
Our response
Environmental
and social
Risk type:
Material themes:
More frequent and severe weather
events and longer-term shifts
in climate patterns could result
in the Bank’s assets, including those
held as collateral, being impaired.
Assets in certain industries could
also lose value from not aligning with
the transition to new technologies,
regulations or consumer trends.
Our reputation could also be impacted
by inadequate environmental and
social commitments and progress
towards them, including financing and
engaging with organisations that do
not meet stakeholder expectations.
• The Board and ELT oversee the strategic approach
to addressing environmental and social risks and
opportunities. We offer a range of tools that can help
our customers build their resilience to the impacts from
climate events.
• The Bank uses scenario analysis and the Group Climate
Risk Materiality Assessment to better understand the
climate-related impacts on our material risk types.
We also continue to enhance our tools, data and
methodologies across a range of business processes
to better identify, assess and manage environmental
and social risks to both our customers and the Bank.
Learn more about our climate risk management on pages 48–61
of the 2024 Climate Report.
Capability
and culture
Risk type:
Material themes:
We require people with the
right skills and values to deliver
exceptional customer experiences
and effectively execute on our
strategy. Competition for these
skills remains high as they are
sought after in various industries,
locally and globally.
• We have embedded a ‘skills-led’ approach to talent
acquisition and the development of our people.
Our strategic workforce planning processes inform
our capability needs to build, buy and partner for.
• We develop and deliver learning and development
programs targeting key skills such as AI, human–centred
design and upskilling of critical job families including
engineers and product owners.
• As part of our diversity, equity and inclusion strategy,
we set goals to advance gender and cultural
representation across leadership roles.
• Initiatives are in place to further embed our culture of
using sound judgement and prioritising the voice of the
customer. As part of performance reviews, our people are
assessed against our values and on how effectively they
managed risk within their role.
Learn more about capability and culture on pages 31–35.
Learn more about our material themes on pages 24–25.
For more detailed information on all of the Bank’s material risks, refer to Note 9 in the Financial report on pages 223–264.
Risk type:
Financial
Non-financial
Strategic
Material themes:
Customer support, experience
and community impact
Engaged and supported
workforce
Governance, culture
and accountability
Cyber security, privacy
and data management
Digitisation, innovation
and emerging technology
Climate transition
and nature
Banking strategy, execution
and operating context
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Material risks continued
Risk context
Our response
Privacy
and data
management
Risk type:
Material themes:
We are conscious of the trust our
customers place in us to collect,
handle, and protect their personal
information in a manner consistent
with our obligations and customer
expectations. Quality data is
critical in enabling us to support
our customers’ needs and make
business decisions.
• We continue to improve privacy processes and capability
across the Bank to achieve compliance in all jurisdictions
we operate.
• Through our data management framework, we are
continuing to manage and improve the tools and
processes that enable CBA to manage the quality
of our data, and retain and dispose of data appropriately.
• We have policies and standards in place to manage
customer records and the appropriate handling
of customers’ personal information.
Learn more about our approach to data privacy on page 46.
Artificial
intelligence
Risk type:
Material themes:
CBA continues to focus on the
use of responsible AI to efficiently
solve problems, better anticipate
customer expectations, and deliver
more timely and personalised
customer experiences. Recent
advances in AI could enable
significant enhancements to
customer experience and process
simplification, but we are mindful
of the need to appropriately
manage potential risks.
• We continue to mature our suite of risk policies,
procedures, tools and reporting to try and ensure the
development and use of AI is appropriately governed.
• When AI is used in our operations, all existing risk
management practices continue to apply.
• CBA continues to be an industry representative on the
National AI Centre’s Responsible AI think tank, supporting
the government through consultation on the safe,
ethical and responsible use of AI solutions.
Learn more about our approach to AI on page 46.
Financial crime
compliance
Risk type:
Material themes:
Banks have a critical role in
protecting our customers, the
community, and the integrity of
the financial system from financial
crimes. The Bank is required to
comply with legislation targeting
financial crime activities globally,
including: Sanctions, Anti-Money
Laundering and Counter Terrorism
Financing (AML/CTF), Anti-Bribery
and Corruption, and Anti-Tax
Evasion Facilitation.
• The Group continues to review and remediate a number
of known AML/CTF compliance issues. As this work
progresses, further compliance issues may be identified and
reported to AUSTRAC or other regulators, and additional
enhancements of systems and processes may be required.
• We continue to invest in risk assessment tools, data and
processes to better understand and detect financial
crime risks. This includes a financial investment in Global
Screening Services, a payments screening specialist.
• We work closely with AUSTRAC and international
regulators, law enforcement bodies and the Fintel
Alliance to detect and deter financial crimes.
• We have initiatives to build capability on the frontlines
to help in identifying criminal activity.
• We continue to partner with Griffith University on
the Academy of Excellence in Financial Crime Investigation
and Compliance program, to build sustainable career paths
in financial crime risk management.
Learn more about how we combat financial crime on page 46.
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MANAGING OUR RISKS
Risk context
Our response
Business
disruption
Risk type:
Material themes:
The Bank operates across a range
of locations, supported by a complex
technology infrastructure.
Operational disruption events could
occur due to internal technology
issues, including potential cyber
security events, the loss of service
providers, loss of availability
of our people or workplaces,
or natural disasters. Such
disruptions can materially impact
our ability to serve customers,
damage our reputation, and can
result in financial losses and
regulatory penalties.
• We constantly monitor the health of our technology
systems and perform security risk reviews, threat
monitoring, and business continuity planning for a range
of disruptions scenarios.
• We implement supplier governance mechanisms to identify
and manage the risk of service provider disruptions.
• The Bank has a robust and flexible crisis management
framework and regularly completes exercises to ensure
a coordinated response to disruption incidents.
• We are enhancing our approach to operational risk, business
continuity and service provider management to better
protect our critical operations from disruption risk events,
and to support compliance with the new APRA Prudential
Standard CPS 230 Operational Risk Management, which
is effective from 1 July 2025.
Regulatory
compliance
Risk type:
Material themes:
The Bank is required to comply
with the increasing volume,
complexity and global reach
of laws, regulations, rules, licence
conditions, industry standards and
codes, and statements of regulatory
policy. Failure to comply can result
in negative outcomes to customers,
severe penalties and adverse
impacts to the Bank’s financial
results and reputation.
• Our regulatory engagement standard drives engagement
with regulators in an open, honest and transparent manner.
• The Bank assesses the impacts of regulatory change
and embeds new requirements into practices, systems
and processes.
• Compliance policies and procedures are in place. Employees
are assigned mandatory compliance training to help ensure
awareness of key obligations relevant to their role.
• Our Compliance Management Framework requires the
identification, documentation and monitoring of compliance
arrangements and key controls.
• All employees are subject to a risk assessment as part
of annual performance reviews.
Learn more about our material themes on pages 24–25.
For more detailed information on all of the Bank’s material risks, refer to Note 9 in the Financial report on pages 223–264.
Risk type:
Financial
Non-financial
Strategic
Material themes:
Customer support, experience
and community impact
Engaged and supported
workforce
Governance, culture
and accountability
Cyber security, privacy
and data management
Digitisation, innovation
and emerging technology
Climate transition
and nature
Banking strategy, execution
and operating context
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Board and strategic priorities
Australians continue to face challenges,
such as persistent inflation, cost of living
pressures, geopolitical uncertainty and
fraud and scams. The Board engages
with key stakeholders to understand their
priorities, listen to their views and ideas
on how CBA can further support them.
Stakeholders have different priorities
and expectations. It is the Board’s
responsibility to weigh views, test the
suitability of the Bank’s strategic goals
over the long term, balance outcomes
for stakeholders and deliver sustainable
returns to shareholders.
This year, we spent considerable time
deliberating whether our strategy
serves our purpose, business model
resilience, areas for sustainable
growth, our culture, customer
support and strategic planning
for the next decade.
Learn more about the Bank’s strategy
on pages 10–19.
Supporting customers
and the broader economy
We recognise that rising cost
of living impacts are being felt
unevenly. The Board monitors
a range of customer-related areas
to deliver fairness and transparency
in the support we are providing.
During the year, the Board reviewed
the Bank’s support for customers
in vulnerable circumstances.
We receive reports on customer
feedback and view operational
metrics such as complaints, disputes,
wait times and service availability.
This information helps us identify and
resolve issues to improve customer
experience. While we have more work
to do, our aim is to create a culture
where our people consistently try
to make our customer experience
better. In order to be there for our
customers, we also need to take care
of our people. The Board has been
especially interested in work that
helps our people offer empathetic
customer service, while also looking
after our peoples’ wellbeing.
Learn more about how we are
focused on supporting our customers
on pages 36–41.
Managing key risks
The Board establishes the strategic
objectives and risk appetite for
the Bank. The Risk & Compliance
Committee and the Audit Committee
support a program of work to inform
the Board. Annually, the Board
Many Australians are worried about financial security
as the economy slows and cost of living pressures
continue. When I meet stakeholders around the country,
I am reminded of our purpose, to build a brighter future
for all, and the role CBA plays in supporting a more
prosperous, sustainable and resilient economy.
Our approach to
corporate governance
Our purpose guides us on how to best
serve our customers. By consistently
meeting our customers’ needs and
seeking to serve the national interest,
we aim to build enduring customer
relationships. We are committed
to keeping the Bank strong and safe
so we can support our customers,
communities and the economy
through the cycle. By supporting
customers to buy a house, save for
the future or start or grow a business,
we aim to improve living standards
for all Australians.
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OUR APPROACH TO CORPORATE GOVERNANCE
assesses the maturity of key risk types
and ensures the Risk Management
Framework (RMF) aligns with external
factors, business plans, and strategic
priorities. Our Risk Management
Declaration to APRA allows the
Board to reflect on the framework’s
effectiveness and make necessary
adjustments. It is through this process
that we are able to continually
identify which risk types require
further improvement.
CBA operates in a highly competitive
market, with a high number
of regulatory obligations and
community expectations. As such,
the Bank aims to continually improve
how it serves its customers, maintains
service resilience and keeps the Bank
safe. We continue to look for ways
we can deliver sustainable banking
services that meet the needs of our
retail and business customers.
The Board acknowledges continued
stakeholder interest in our lending
activities’ impact on the environment.
Our Environmental and Social (E&S)
Framework outlines our environmental
commitments. We are progressively
setting operational and sector-level
financed emissions targets in line with
pathways to net zero by 2050. We now
have financed emissions targets on
sectors that account for 67% of the
Bank’s 2020 financed emissions, and
our roadmap outlines the steps we
intend to take to meet our commitments.
Regular updates on the Bank’s progress
on climate targets are provided to the
Board to assist our oversight of how
we are playing our role to support
a coordinated, reliable, affordable and
inclusive transition for Australia.
Learn more about how the Bank manages
risk on pages 70–79.
Governance, culture
and accountability
Maintaining a high standard of
governance is essential in delivering
on our strategy and ensuring
that we do right by our customers
and communities.
The Board sets the tone for the Bank’s
culture and supports management
in promoting the right mindsets and
behaviours. Positively, our most recent
organisational culture assessment
shows our peoples’ continued
progress in placing customers at the
centre of all we do to deliver positive
customer outcomes.
Attracting and retaining talent with
the right skills at all levels is needed
to deliver our strategic ambitions.
Through our People & Remuneration
Committee (PRC), we monitor and
prioritise building a highly capable
workforce while progressing our
diversity and inclusion goals.
CBA’s Executive Leadership Team (ELT)
is highly regarded and has delivered
good performance through consistent
strategic and operational execution.
Our executive remuneration framework
seeks to attract and retain exceptional
talent, align with and deliver sustainable
long-term shareholder returns and
meet regulatory requirements. It is
imperative that we hold our executive
team accountable for their actions,
that their remuneration rewards positive
outcomes and is adjusted for poor
outcomes. Concurrent meetings bring
together the PRC, Audit Committee,
Risk & Compliance Committee and
Nominations Committee members
to thoroughly review and discuss
performance over the year – reflecting
on achievement of strategic priorities,
risk management and living our values.
Information presented at these meetings,
such as risk scorecards, conduct reviews,
key risk issues, internal audit findings
and financial performance evaluations,
inform decisions on both collective and
individual remuneration impacts.
Board effectiveness
We remain committed to ensuring the
Board functions effectively, including
how it allocates its time and how
it is constituted. This year, I retired from
my other ASX-listed Board appointment
to allow me to dedicate my time to my
responsibilities as Chair of CBA.
Both Board and management
succession planning takes
a considerable amount of time
and dedication. Board succession
planning is essential for replacing
departed skills, enhancing existing
capabilities and preparing for future
possibilities. My aim is to achieve
a balanced mix of skills, experience
and perspectives. The Board requires
a varied range of skills and experience,
from banking and customer experience
to technology, regulation and risk,
as well as operational expertise in
running large businesses, financial
decision making, supporting
people and culture, understanding
remuneration frameworks, leadership
values and behaviours. The skills
matrix helps inform where the Board
may require renewal. This year,
I spent considerable time meeting
with potential candidates to learn
more about their experience and
availability to inform future plans.
Continuous education forms an
important role in enabling directors
with diverse experience and backgrounds
to participate effectively in Board
decisions. All Directors are required
to complete mandatory training
and this year attended targeted
education sessions on topics such as
the Financial Accountability Regime,
cloud technology, artificial intelligence
and nature resilience and risk.
Learn more about our approach
to Board composition, renewal and
skills on pages 88–89.
Closing
As the Chair of CBA, I’d like to extend
my personal thanks to my diligent
fellow Directors who are focused on
the Bank’s stability and safety, our
dedicated people who want to improve
our customers’ experience with CBA,
our loyal customers and communities
and our supportive shareholders.
CBA is well positioned for the future,
to continue supporting our customers,
communities and the nation.
By executing our strategy, we aim
to contribute to a more prosperous,
sustainable and resilient future
for Australia.
Paul O’Malley
Chair
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Our corporate governance framework
The Board oversees the Bank’s corporate governance framework. It is responsible
for providing leadership and strategic guidance, and overseeing management and
delivery of the Group’s purpose.
We are committed to continuously improving our governance practices, seeking to ensure they are aligned with our business
and stakeholders’ needs. Effective corporate governance is key to the Bank’s ability to deliver on our purpose and strategy.
CBA’s corporate governance framework seeks to provide clear guidance on how authority is exercised and oversight is
provided. The key components of our corporate governance framework, including key functions of the Board, its Committees
and the ELT are shown below.
Learn more about our approach to governing climate-related risks and opportunities in the Governance section of our 2024 Climate Report.
Financial Risk
Committee
Assists and advises
the CEO on the
Group’s financial risks
in accordance with
the Risk Appetite
Statement (RAS) and
Risk Management
Approach (RMA).
Executive
Leadership Team
Responsible for making
specific recommendations
to the CEO and agreeing
common actions addressing
strategy, business
performance, people
leadership and culture,
and risk and compliance
management and control.
May establish committees
to assist it in carrying out
its functions.
Non-Financial Risk
Committee
Assists and
advises the CEO
on the governance,
optimisation and
effective management
of the Group’s
non-financial risks in
accordance with the
RAS and RMA.
Asset and Liability
Committee
Optimises actual and
strategic balance sheet
settings and effective
management of the
Group’s non-traded
market risk, structural
foreign exchange
risk, liquidity, funding
and capital.
Risk & Remuneration
Review Committee
Supports the Group
Chief Risk Officer to
advise the CEO and the
Board on the inclusion
of risk considerations
in determining
remuneration outcomes
across the Group.
Board
Provides leadership and strategic guidance, and oversees management and delivery of the Group’s purpose.
Chief Executive Officer
Responsible for the day-to-day management of CBA and execution of the Group’s strategic priorities.
Independent assurance and advice
including internal and external audit
Audit Committee
Review and oversight of
the financial reporting
process, the audit process
and internal controls
and compliance.
Risk & Compliance
Committee
Review and oversight
of risks impacting the
Group and the Risk
Management Framework.
People &
Remuneration Committee
Review and oversight
of people and remuneration-
related policies, frameworks
and practices.
Nominations Committee
Review and oversight of Board
and Committee composition,
Non-Executive Director
appointment and renewal and
CEO succession planning.
Oversee
Chair:
Chief Risk Officer
Chair:
Chief Executive Officer
Chair:
Chief Executive Officer
Chair:
Chief Financial Officer
Chair:
Chief Risk Officer
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OUR APPROACH TO CORPORATE GOVERNANCE
Our Board in action
Board planning and agenda setting
In this financial year, the Board held 12 meetings. These
included six multi-day Board and Committee meetings
with structured, standing agendas and six shorter Board
meetings. Two strategy sessions were also held as part
of the multi-day Board meetings. Outside of Board meetings,
various directors met with directors and senior executives of
Commonwealth Bank of Australia (Europe) N.V. and the CBA
London Branch and also completed operational site visits to
India and New Zealand.
So that the Board and Committees’ time is used efficiently
and discussions reflect the Bank’s priorities, agendas
are reviewed by the respective Chairs, in consultation
with the Group Company Secretary and CEO. CBA uses
forward planners to provide the Board and Committees
with a comprehensive view of the planned agendas and
an opportunity to actively adjust, as priorities change.
The Board also retains flexibility for ad hoc matters
to be discussed at meetings where appropriate.
Steps are taken to facilitate effective communication
between management and the Board ahead of Board
and Committee meetings. These include responsible
management providing input into certain agenda items
and attending pre-meetings between Chairs and the Group
Company Secretary. After the meetings, actions for follow
up are shared so that requests of management are clear.
To promote effective decision making and a consistent
approach for writing papers, training on Board and
Committee paper writing was offered to authors across
the Bank throughout the course of the year.
Learn more about the key areas of Board consideration
on pages 86–87.
Board meetings
Strategy is regularly discussed
at Board meetings.
Progress against strategic
objectives forms part of the
updates provided to the Board
by senior executives, including
the CEO. Specific stand-alone
agenda items relating to strategic
matters are also discussed at each
multi-day Board meeting. The
topics discussed throughout the
year include the Business Plan
and reports from management on
customers, business performance,
competition, regulation, mergers and
acquisitions, environmental strategy
and technology strategy.
Board Committees
A number of the Committees assist
the Board in its oversight.
For example, the Risk & Compliance
Committee is responsible for
reviewing and endorsing the Strategic
Risk Management Policy to the
Board for approval. The Policy sets
out the requirements for identifying,
monitoring, reporting and responding
on strategic risks originating from
changes in the Bank’s external and
internal operating environments
and from the implementation of the
Group’s strategy. Another example
is the Audit Committee, which is
required to assess the independence
of the external auditor annually. This
year, after reviewing key assessment
considerations, the Committee
resolved that the external auditor
be assessed as independent.
Strategy deep dives
The Board held two strategy
deep dives this financial year.
These were opportunities for the
Board to reflect on the Group
Strategy considering the complex
external environment, review where
good progress has been made
against Group priorities and where
there are opportunities to do more.
Topics at the December strategy
session included business model
resilience and artificial intelligence.
Linking strategy and purpose was
a key theme of the April Strategy
session. The Board and management
also discussed competition, trust,
culture and growth.
Overseeing the delivery of our strategy
The Board’s primary purpose includes the provision of leadership and strategic guidance.
Our governance practices play an essential role in providing oversight of the Bank’s operations
and contribute to the development of our strategy.
The Board is responsible for endorsing the strategic and business unit plans and approving the financial plans which
incorporate strategic and other perspectives to be implemented by management. The different ways in which the
Board oversees the Group’s strategy are explained below.
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Board activities
The Board discusses a range of topics where they are responsible for oversight. Significant agenda
items at the six multi-day Board meetings in the 2024 financial year are included in the table below.
Agenda items may consist of several consolidated issues considered by the Board.
Board meetings
Category
Agenda item
Aug 23
Oct 23
Dec 23
Feb 24
Apr 24
Jun 24
Strategy
Strategic matters
Mergers and acquisitions
Business plan
Environmental & social
Environmental and social matters
Customer & communities
Complaints
Trust, reputation and brand
Customer remediation
Organisation & people
Health, safety and wellbeing
Capability and culture
External
Economic report
Investor relations
Business performance
Management reports
Financial risks & reporting
Dividend recommendation and capital update
Funding and liquidity
Capital management
Non-financial risks
Non-Financial Risk Committee report
Insurance program
Legal & regulatory
Legal and regulatory
Meetings with regulators 1
Governance & policy
Board evaluation and charter
Policies
Corporate governance
The table broadly reflects the topics considered by the Board during this financial year but is not exhaustive.
Committee matters
Committee updates, reports and recommendations
Concurrent meeting – remuneration and performance outcomes
for senior executives
1 Meetings with regulators may be adjacent to Board meetings.
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OUR APPROACH TO CORPORATE GOVERNANCE
Approach to stakeholder engagement
Stakeholder engagement is an important aspect of Board decision making. Meeting with internal
and external stakeholders builds a better understanding of diverse views and needs, and helps
identify areas of opportunity and risk for the Bank.
Stakeholders
Board activities
Customers
The Board has an ongoing commitment
to ensuring the customer experience
is central in decision making, and that
customer needs are being met through
the Bank’s strategy.
• As part of the Board’s ongoing commitment to better
understanding customer needs, the Directors met with
Queensland customers to hear about their experiences
and challenges.
Our people
The Board actively monitors the Bank’s
culture, seeking to ensure the lived
experience of our people aligns with
CBA’s purpose and values, and that they
are supported and skilled for the future.
• The Board approved updates to the Code of Conduct and
reviewed CBA’s people strategy and progress in building
capability, long-term careers and reskilling opportunities.
• Board members attended an event with high-performing
team members thanking them for their work.
Community
The Board recognises that in order to
deliver long-term sustainable outcomes
for our stakeholders, we must understand
the expectations of, and impact on,
the communities in which we operate.
• The Board considered and discussed external perspectives
on CBA’s brand, reputation and level of trust in the
community. The Board also considered the progress of the
Bank’s social impact program, which focuses on people,
customers and community.
Investors
The Board places high importance on
overseeing the execution of the strategy
and understanding what impacts
investor sentiment, so that we remain
well positioned to deliver sustainable
long-term value for shareholders.
• The Board heard relevant views on investor sentiment
from an external investor perspective.
• To better understand key themes, the Chair met with
38 investors including proxy advisors ahead of CBA’s
2023 AGM.
Government
and
regulators
The Board is focused on ensuring
meaningful engagement
with both governments and
regulators, to continue building
constructive relationships.
• The Board regularly engages with regulators such as ASIC,
APRA, AUSTRAC, the Australian Financial Complaints
Authority and the Banking Code Compliance Committee
to discuss key industry issues.
• The Board also met with senior Federal Ministers and
Shadow Ministers to better understand top of mind matters.
Partners
and suppliers
The Board recognises the important
role suppliers play in helping us deliver
our strategy, and support CBA’s
investment in strategic partnerships.
• The Bank is focused on providing enhanced customer
benefits through increased implementation of AI and
cyber security initiatives. The Board actively engaged
with key suppliers, such as Microsoft, to better
understand and support these initiatives.
Hearing directly from customers
In their continuous effort to better understand customer
needs, the Board met with customers in Brisbane to listen
and gather insights about their experiences. In December
2023, the Board visited customers in Brisbane in different
sectors such as manufacturers of steel, glass and electrical
equipment and a property group.
The Board learnt about the different business needs,
how some had grown into internationally recognised
organisations exporting their products globally, while
others were leading in innovation in their respective sectors.
With the support of CBA, these businesses are actively
contributing to Australia’s economic growth.
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Strategy and business performance
Strategy is a standing agenda item on each
multi-day Board meeting. Key activities included:
• Considering and approving the proposed
FY24–26 Business Plan and consideration
of the draft Group FY25–27 Business Plan.
• Reviewing key strategic initiatives such as the
Bank’s technology strategy, ways of working
update, the Bank’s climate strategy and the
annual funding strategy.
• Receiving regular updates on merger and
acquisition activity.
• Receiving regular reports from the CEO and
Group executives on business performance.
• Attending two Board strategy sessions.
Spotlight
Artificial intelligence
This year the Board has spent time building a greater understanding
of artificial intelligence (AI), including the Bank’s approach to risk,
governance and opportunities, particularly in the context of generative
AI. It benefited from education sessions on AI and considered a report
on AI Safety Governance. The Board also approved the Group Artificial
Intelligence Policy, which supports the safe and responsible use of AI.
Key stakeholders:
Customers
Our people
Investors
Government
and regulators
Material themes:
Cyber security, privacy
and data management
Digitisation, innovation and
emerging technology
Banking strategy, execution and operating context
Key areas of Board discussion during 2024
Fair treatment of customers
The Board actively monitored a range
of customer-related topics and initiatives
this financial year. Key activities included:
• Monitoring the progress of customer
remediation initiatives.
• Reviewing reporting on CBA’s performance
on trust, reputation and brand, considering the
link between trust and advocacy, and the Bank’s
broader contribution to the community.
• Monitoring the progress of the Bank’s social
impact program outcomes and priority goals for
this financial year, including the focus on helping
to prevent domestic and family violence and
financial abuse.
• Receiving reports on customer complaints.
People and culture
The Board regularly addresses a range of people
and culture-related topics and issues.
Key activities included:
• Approving changes to the Code of Conduct.
• Considering the 2023 Organisational Culture
Assessment progress report.
• Receiving updates on workplace misconduct
governance, trends, risks and operations, including
matters of significance under the SpeakUP Program.
• Considering and discussing reports related to health,
safety and wellbeing, including incident trends,
material investigations and assurance activity.
• Reviewing and approving the Diversity, Equity
and Inclusion strategy.
• Reviewing the Group’s remuneration strategies
and remuneration outcomes for the CEO, the
CEO’s direct reports and other specified roles.
Spotlight
Customer complaints
The Board received regular reports on customer complaints and
the actions underway to improve complaint handling and prevention.
This included reports on trends in complaint volumes, the operating
context and complaint demographics, as well as a deep dive
on the support the Bank provides for customers in vulnerable
circumstances. There continues to be a high level of scrutiny
on how the Bank deals with scam-related complaints.
Key stakeholders:
Customers
Our people
Government
and regulators
Material themes:
Customer support, experience and community impact
Spotlight
Respect at work
The Respect@Work legislation was one of the topics included
in the Annual Director’s Duties Training held during this financial
year. The training emphasised the legislation’s focus on actively
preventing workplace sexual harassment, sex discrimination
and other relevant unlawful conduct.
Key stakeholders:
Our people
Investors
Government
and regulators
Material themes:
Engaged and supported
workforce
Governance, culture
and accountability
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OUR APPROACH TO CORPORATE GOVERNANCE
Financial oversight
The Board remains focused on operational excellence
and driving growth in its core banking businesses,
as well as prudent balance sheet and capital
management. Key activities included:
• Monitoring the Bank’s operating performance.
• Approving the FY23 full year and FY24 half year
financial results.
• Approving the FY23 final dividend and the FY24
interim dividend.
• Receiving and considering regular reports from
management in relation to the Bank’s funding,
capital management and liquidity positions.
• Noting and discussing simplification and
cost strategies.
Risk management
The Board’s focus included the management
of financial risks such as funding and liquidity,
capital adequacy and non-financial risks, including
fraud and scams, privacy and financial crime
compliance risk. Key activities included:
• Approving the Group’s Risk Management Approach.
• Overseeing the Bank’s RMF and its operation
by management, including receiving regular
reports on financial and non-financial risk.
• Monitoring the Bank’s risk culture.
• Approving changes to the Risk Appetite Statement.
• Approving revised risk-related policies including the
Group Dealing with Related Entities Policy and the
Business Continuity Management Policy.
• Noting and discussing the key outcomes of the
renewal of the Bank’s insurance program.
Environmental and social
The Board is responsible for considering the
environmental and social impact of the Group’s
activities and overseeing adherence to the
E&S Framework and climate-related policies.
Key activities included:
• Receiving regular reports on the Bank’s E&S
program, including priorities for the year.
• Receiving reports on updates to CBA’s
E&S strategy.
• Receiving updates on the Bank’s program for the
implementation of the International Sustainability
Standards Board’s Standards.
• Considering the FY24 climate change disclosures.
• Considering CBA’s assurance plan for E&S risk.
• Approving the FY23 Modern Slavery Statement.
• Considering updates on the Bank’s social impact,
including the Reconciliation Action Plan, community
support and the CommBank Foundation.
Spotlight
Balance sheet resilience
This year, the Risk & Compliance Committee supported the
Board in its focus on capital adequacy and balance sheet
resilience, seeking to ensure that the Bank is prepared for
a wide range of economic scenarios. The Board received regular
updates from management regarding the Group’s capital,
funding, and liquidity risks and balance sheet considerations
in the current economic environment, as well as reviewing and
approving the Group’s capital policies.
Key stakeholders:
Customers
Investors
Government
and regulators
Material themes:
Banking strategy, execution and operating context
Spotlight
Fraud and scams
Given the harm caused by fraud and scams, the Risk &
Compliance Committee supported the Board in considering the
implementation of processes to reduce customer susceptibility
to scams, and the steps taken to respond to the increased
incidents of scam-related complaints. This included the
implementation of in-app behavioural security and deployment
of CallerCheck and CustomerCheck for customer ID verification.
Key stakeholders:
Customers
Investors
Government
and regulators
Material themes:
Customer support, experience
and community impact
Cyber security, privacy
and data management
Spotlight
Australia’s transition pathways
Two years ago, we outlined our transition roadmap for
progressively setting sector-level financed emissions targets
in line with pathways that aim to limit global warming to 1.5°C.
Setting and tracking progress against sector-level financed
emissions targets to help the Bank contribute to the global goals
of the Paris Agreement. The Board approved six new sector-level
targets covering our transport and Australian commercial
property sectors.
Key stakeholders:
Customers
Community
Investors
Government
and regulators
Partners
and suppliers
Material themes:
Climate transition and nature
Customer support, experience
and community impact
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Board performance,
composition and renewal
The Board recognises the value of having an appropriate mix of skills,
experience and diversity to support sound decision making.
As at 30 June 2024, the Board had
nine Directors: eight independent
Non-Executive Directors and the CEO.
With the assistance of the Nominations
Committee, the Board regularly
reviews its size and composition and
considers a number of factors including
independence, skills, experience and
diversity of views.
Board performance evaluation
Continuously monitoring and improving
its performance and the performance
of its Committees and individual Directors
remains important to the Board. Under its
Charter, the Board is required to annually
assess both its performance and that
of its Directors. The Board has processes
in place to conduct these performance
assessments. An independent external
performance evaluation of the Board and
its Committees is conducted at least
once every three years. An independent
external performance evaluation was held
in 2024, with the results made available
to the Board in August 2024.
Board renewal
Board renewal and orderly transitions
are important for ensuring effective
and sustainable Board performance.
The Board Skills Matrix (Matrix) frames
the ongoing Board renewal process,
so the prescribed skills and experience
are present within the Board and address
the Bank’s existing and emerging business
and governance issues.
In this financial year, the only change
to the Board’s composition was the
resignation of Genevieve Bell AO,
effective 31 October 2023, following
her appointment as the Vice Chancellor
and President of the Australian
National University.
Lyn Cobley was appointed as a member
of the Risk & Compliance Committee and
the Audit Committee, with effect from
1 October 2023.
Board education and training
Providing Directors with opportunities
to enhance their skills and knowledge
is essential for them to perform their
role effectively.
The induction program for new
Non-Executive Directors is customised
to their skills and experience. It is reviewed
annually by the Nominations Committee.
In 2024, it was reframed as a multi-stage
process in which reference material and
presentations are delivered progressively.
The Nominations Committee reviews
the Board continuing education program
annually. The Committee seeks to ensure
there is appropriate continuing education
opportunities for Directors individually
and collectively, to develop and maintain
the skills and knowledge which supports
the Board’s decision making.
Annual Directors’ duties training is
provided to the Board and all directors
of Group subsidiaries. Directors are
subject to the Group Mandatory Learning
Policy, which requires them to complete
training on Group policies. This financial
year, topics included were financial crime
compliance, privacy, information security,
Code of Conduct and conflicts of interest.
The Board also attended several targeted
education sessions this year on topics
such as the Financial Accountability
Regime, AI and nature resilience and risk.
Board skills and experience
Frequent and deliberate consideration
is given to diversity of thought,
background, experience and skills.
Each year the Directors, including the
Chair, self-assess their individual skills
and experience. This assessment informs
the Matrix, which sets out the skills
and experience considered essential
for effective decision making. At the
Bank, the self-assessment ratings and
Matrix are reviewed and discussed by the
Nominations Committee and approved
by the Board.
Board tenure
0–1 years
0%
1–3 years
22%
3–6 years
33%
6–9 years
45%
Board diversity
Male
56%
Female
44%
As at the date of this report, the
numbers have been rounded to
ensure that the total adds to 100%
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OUR APPROACH TO CORPORATE GOVERNANCE
Board skills and experience
The Matrix is considered in the context of our external environment and
strategic priorities and is used to inform areas of Board continuing education,
as well as guide the ongoing Board renewal process.
High competency, knowledge and experience
Practised or direct experience
Awareness
Skills and experience
Relevance to CBA
Leadership
9
Held senior leadership role such as CEO
or similar position in an organisation
of significant size or complexity.
Setting strategy and evaluating the
performance of senior leaders.
Financial services
6
3
Experience in the financial services sector and
regulation, including retail and commercial
banking services and adjacent sectors.
Appreciation of the operational
landscape, opportunities and challenges
in the sector.
Financial acumen
7
1
1
Proficiency in financial accounting and
reporting, capital management and/or
actuarial experience.
Assessing complex financial and capital
management initiatives.
Strategy and
global perspective
9
Experience in leading, developing
or executing strategic business
objectives, including bringing to bear
a global perspective.
Reviewing and setting the organisational
strategy in a global context.
Governance
7
2
Experience as a Non-Executive Director
of a listed entity (Australia or overseas)
and/or understanding of legal and
regulatory frameworks underpinning
corporate governance principles.
Understanding local and offshore legal
and regulatory frameworks to effectively
perform the role of Director.
Risk management
7
2
Experience in identifying, assessing and
monitoring systemic, existing and emerging
financial and non-financial risks.
Monitoring risk appetite, assessing
the overall risk profile and adapting
to emerging trends.
Digital and technology
2
5
2
Experience in technology, use of data and
analytics, digital transformation and innovation
and their impacts on customer experience and
cyber security and other technology risks.
Supporting the Bank’s digital strategy.
Enhanced customer
outcomes
6
3
Understanding of the changing needs
of customers with a focus on improving
their financial wellbeing and enhancing
their experience.
Providing constructive challenge
to ensure customer needs are met.
Stakeholder
engagement
7
2
Experience in building and maintaining
trusted and collaborative relationships
with governments, regulators and/or
community partners.
Ensuring an effective engagement
program with regulators and other
stakeholders is in place.
People and culture
8
1
Understanding organisational culture,
succession planning, and remuneration
and reward frameworks.
Overseeing the culture of the Group
and upholding the Code of Conduct.
Environment and social
4
5
Understanding the potential risks and
opportunities from an environmental
and social perspective.
Influencing sustainable practices,
policies and decisions that support
environmental and social outcomes.
Skills matrices for each of the Board Committees have also been developed to evaluate the suitability of skills.
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Board of Directors
Contribution to the Board
Matt has over 23 years’ experience in banking across business,
institutional and retail, and has held a number of senior leadership
roles since joining the Bank in 1999. From 2012, until Matt’s
appointment as Chief Executive Officer, he was Group Executive
Retail Banking Services and led the development of digital products
and services for the Bank. Between 2006 and 2010, Matt was
Managing Director of the Bank’s online share trading business,
CommSec, overseeing a significant modernisation of its technology
platform, and growing market share and profitability.
Current external appointments
Director of the Business Council of Australia and Financial Markets
Foundation for Children.
Directorships of other listed entities in the last three years
Nil.
Appointed: 9 April 2018
Age: 48 years Residence: Sydney, Australia
Contribution to the Board
Paul has broad executive leadership and operational experience.
He served as Managing Director and Chief Executive Officer
of BlueScope Steel Ltd for 10 years, after joining the company
as Chief Financial Officer. Previously, he was the Chief Executive
Officer of TXU Energy, a subsidiary of TXU Corp based in Dallas,
Texas. Paul has a strong background in finance and accounting,
having worked in investment banking and audit. Paul is a former
Director of the Worldsteel Association, Chair of its Nominating
Committee, and Trustee of the Melbourne Cricket Ground Trust.
Current external appointments
Nil.
Directorships of other listed entities in the last three years
Coles Group Limited (October 2020–October 2023).
Appointed: 1 January 2019, Chair from
10 August 2022
Board Committees:
Age: 60 years Residence: Melbourne, Australia
Paul O’Malley
BCom, M.App Finance, ACA
Chair and Independent Non-Executive Director
Matt Comyn
BAv, MCom, EMBA, GMP
Managing Director and Chief Executive Officer
Committees
Nominations
Audit
Risk & Compliance
People & Remuneration
Committee Chair
Genevieve Bell AO retired as a Non-Executive Director on 31 October 2023.
A strong, diverse team with a broad and
complementary mix of skills and experience.
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OUR APPROACH TO CORPORATE GOVERNANCE
Contribution to the Board
Lyn is an experienced banking and financial services leader with
over 30 years’ experience in senior positions at Australian and global
banks. During her career, Lyn was the CEO of Westpac Institutional
Bank, Group Treasurer of Commonwealth Bank of Australia, as well as
holding senior positions at Barclays Capital and Citibank Ltd. In these
roles, Lyn developed extensive knowledge of financial markets,
managing through uncertainty, and creating greater balance sheet
strength and resilience to support customers and stakeholders.
Current external appointments
Council member and Chair of the finance and facilities committee
at Macquarie University, and an Advisory Member, EXL APAC
Advisory Council.
Directorships of other listed entities in the last three years
Nil.
Contribution to the Board
Julie is an experienced financial services professional with
substantial banking, strategy, risk and regulatory experience.
She brings more than 20 years’ experience as an Executive and
a Director in major European financial services organisations.
Julie held a number of leadership positions with Nordea Bank Abp,
including the role of Group Chief Risk Officer. She served with the
Danish Financial Services Authority, as Deputy Director General,
and served on the Management Board of the European Securities
and Markets Authority. Julie is the former Chairman of the board
of Fundamental Fondsmæglerselskab A/S.
Current external appointments
Chairperson of Gro Capital, and a Senior Advisor to the European
Union Global AML/CFT Facility.
Directorships of other listed entities in the last three years
Trifork AG (November 2020–present), Velliv A/S
(March 2021–March 2023), UniCredit SpA (April 2024–present),
and DNB Bank ASA (June 2020–April 2024).
Contribution to the Board
Peter brings a diversity of thought in the areas of risk, customer
perspectives and environmental, social and governance practices.
He has significant experience in customer service and innovation
within the insurance segment and financial services, and a deep
understanding of environmental principles. Peter was previously
Managing Director and Chief Executive Officer of Insurance
Australia Group Ltd (IAG). Peter joined IAG in 2010 and held
a number of senior roles.
Current external appointments
Director of Lawcover Insurance Pty Ltd, a member of the
Bain Advisory Council, and an Advisory Member, EXL APAC
Advisory Council.
Directorships of other listed entities in the last three years
nib holdings ltd (July 2021–present), and AUB Group Limited
(July 2021–present).
Appointed: 1 October 2022
Board Committees:
Age: 61 years Residence: Sydney, Australia
Lyn Cobley
BEc, GAICD
Independent Non-Executive Director
Appointed: 1 September 2021
Board Committees:
Age: 53 years Residence: Copenhagen, Denmark
Julie Galbo
LLM, Executive Management Program (INSEAD)
Independent Non-Executive Director
Appointed: 1 March 2021
Board Committees:
Age: 63 years Residence: Sydney, Australia
Peter Harmer
Harvard Advanced Management Program
Independent Non-Executive Director
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Contribution to the Board
Simon has extensive leadership experience in technology, process
effectiveness and business strategy. Simon was Managing Director
of Spark New Zealand, where he held this position for seven years
until 2019. He is also a former Chief Executive Officer of Auckland
International Airport and has previously held senior management
roles in telecommunications and energy companies.
Current external appointments
Chair of Kainga Ora, Housing New Zealand Ltd and Housing New
Zealand Build Ltd, and Chair of three privately owned businesses
– Smart Environmental Group Ltd, Les Mills International Ltd,
and Designer Wardrobe Ltd.
Directorships of other listed entities in the last three years
Nil.
Appointed: 1 September 2020
Board Committees:
Age: 64 years Residence: Auckland, New Zealand
Simon Moutter
BSc, BE (Hons), ME
Independent Non-Executive Director
Contribution to the Board
Mary is an intellectual property and trade practices lawyer with over
35 years’ international legal, governance and technology experience.
Mary served as the Chairman of Ashurst Australia before its full
merger with Ashurst LLP, and was the global Vice Chairman of the
post-merger firm. She retired as a Partner of Ashurst at the end
of April 2018.
Current external appointments
Chairman of the Macfarlane Burnet Institute for Medical Research
and Public Health Ltd, Board member of the Brandenburg Ensemble
(Australian Brandenburg Orchestra), the Richmond Football Club,
and its wholly owned subsidiary, Aligned Leisure Pty Ltd.
Directorships of other listed entities in the last three years
Nil.
Appointed: 14 June 2016
Board Committees:
Age: 65 years Residence: Melbourne, Australia
Mary Padbury
BA LLB (Hons), GAICD
Independent Non-Executive Director
Board of Directors continued
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OUR APPROACH TO CORPORATE GOVERNANCE
Contribution to the Board
Anne is an experienced listed company director and chair with
substantial enterprise risk, governance and strategy experience
in banking and financial services, engineering services in the energy
sector, pharmaceuticals and manufacturing. During her 30-year
executive career, Anne held senior leadership positions in corporate
and private banking including Westpac Banking Corporation,
ANZ and Bank of Singapore. She is the former Chairman of
Commonwealth Bank’s financial advice companies.
Current external appointments
Non-Executive Director of the Cyber Security Research Centre
Ltd, New South Wales Treasury Corporation, and director of the
Australia-Israel Chamber of Commerce New South Wales Division.
Directorships of other listed entities in the last three years
Metals Acquisition Limited (22 July 2024–present), Worley Ltd
(November 2017–July 2024), Trifork AG (April 2022–present),
Blackmores Ltd (Chair: October 2020–November 2022), and
G.U.D. Holdings Ltd (August 2015–August 2021).
Appointed: 5 March 2018
Board Committees:
Age: 63 years Residence: Sydney, Australia
Anne Templeman-Jones
BCom, EMBA, MRM, CA, FAICD
Independent Non-Executive Director
Contribution to the Board
Rob has extensive leadership experience across banking, finance
and risk in both the private and public sectors. During Rob’s 30 year
executive career with Westpac Banking Corporation he held
a number of senior leadership positions, including CEO of Westpac
Institutional Bank, Chief Risk Officer and Group Treasurer.
Rob is a former Chair and Director of New South Wales Treasury
Corporation, former Secretary of NSW Treasury, and former
Secretary of NSW Industrial Relations.
Current external appointments
Member of the Council of the Australian National University
(effective from 1 July 2024).
Directorships of other listed entities in the last three years
GPT Group (May 2020–May 2024) and Transurban Ltd
(November 2020–present).
Appointed: 4 September 2017
Board Committees:
Age: 59 years Residence: Sydney, Australia
Rob Whitfield AM
BCom, Grad Dip Banking, Grad Dip Fin, AMP,
SF Fin, FAICD
Independent Non-Executive Director
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Executive Leadership Team
Priorities: Alan is responsible for the Group’s finance, treasury, tax, investor
relations, environmental strategy, property and procurement functions.
His priorities are ensuring his teams provide accurate, independent and
objective analysis to drive sound decision making and performance, managing
balance sheet settings in a sustainable and conservative manner, and delivering
capital generation that supports better outcomes for all stakeholders.
Experience: Alan joined the Bank in 2003 and has held numerous senior roles
within finance and treasury. He started his career with PwC’s Financial Services
practice in the UK before joining Arthur Andersen in Australia. Alan is a member
of the Institute of Chartered Accountants of Scotland.
Alan Docherty
Group Chief Financial Officer
Appointed: October 2018
Priorities: Andrew is responsible for serving the banking and finance needs
of large corporates, governments and institutions in Australia and select
international markets. IB&M provides a full range of financial markets, capital
raising, sustainable finance, transactional banking, and risk management
solutions and services. His priority is to ensure that IB&M helps customers
build Australia’s future economy by leveraging its international network,
capital, capabilities, data and analytics.
Experience: Andrew joined the Bank in 2015 as Executive General Manager,
Global Markets. His career in investment banking spans more than 20 years
having held various leadership positions with Goldman Sachs and Credit Suisse
First Boston in London, New York and Australia.
Andrew Hinchliff
Group Executive, Institutional
Banking and Markets
Appointed: August 2018
Priorities: Sian is focused on helping the Bank ensure that CBA’s culture
is anchored in our values of Care, Courage and Commitment, that our people
and communities are skilling for the future, we are offering the very best
experience for employees and we are a workplace of choice for key talent.
She is also committed to promoting employee wellbeing, and strengthening
and supporting a diverse and inclusive workforce.
Experience: Sian joined the Bank in 2014 and was Executive General Manager,
Direct Channels prior to her current role. Previously, Sian spent nine years
at Westpac, in retail and commercial banking, marketing and call centre teams.
Sian also spent 10 years in senior HR consulting roles in the UK and two years
in Australia consulting to APRA.
Sian Lewis
Group Executive, Human Resources
Appointed: August 2018
David Cohen ceased as Deputy Chief Executive Officer effective 31 December 2023.
Carmel Mulhern ceased as Group General Counsel and Group Executive, Legal & Group Secretariat effective 31 August 2023.
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OUR APPROACH TO CORPORATE GOVERNANCE
Priorities: Monique is responsible for bringing together the Bank’s marketing,
branding, stakeholder insights, government relations, communications and
social impact functions. Her priorities are to guide how we engage with
customers, communicate with stakeholders and the broader community,
and manage reputational issues.
Experience: Monique joined the Bank in 2011 and was the Chief Marketing
Officer prior to her current role. Monique has more than 20 years’ experience
building brands for global clients through her career at leading communication
agencies McCann-Erickson WorldGroup, DDB and Ogilvy and Mather.
Monique Macleod
Group Executive, Marketing
and Corporate Affairs
Appointed: September 2021
Stuart Munro
Group Executive, Group Strategy
Appointed: March 2024
Priorities: Stuart is responsible for supporting the CBA Board and
Executive Leadership Team in developing the Group’s strategy. To support
execution of the strategy, he is also responsible for mergers and acquisitions,
business development, strategic divestments, and x15, the Bank’s venture
building business.
Experience: Stuart joined the Bank in 2012 and has held senior roles across
Group Strategy, Retail Banking Services, and International Financial Services.
Prior to joining CBA, Stuart held various roles at McKinsey & Co. in London,
New York and Sydney where he served leading financial services companies
and other institutions on a range of strategy-related topics.
Gavin Munroe
Group Chief Information Officer and
Group Executive, Technology
Appointed: November 2022
Priorities: Gavin is responsible for the Group’s technology strategy and its
implementation. This includes ownership of digital delivery, data and analytics,
AI and Gen AI strategy, technology and technology infrastructure, as well as
safeguarding the Bank. His priority is to provide a seamless and personalised
digital banking experience for our customers.
Experience: Gavin has over 20 years’ experience in financial services.
Prior to joining the Bank in 2022, he was Global Chief Information Officer
for Wealth and Personal Banking at HSBC. He has held other senior roles
at Bank of America, Merrill Lynch, Synechron, Wachovia and Saxon.
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Executive Leadership Team continued
Angus Sullivan
Group Executive, Retail Banking
Services
Appointed: July 2018
Priorities: Angus is responsible for providing market-leading services to the
retail customers of CBA and Bankwest. His priorities are to deliver exceptional
customer service and outcomes, global best digital experiences, technology
and innovation in retail products and services.
Experience: Angus joined the Bank in 2012 as Executive General Manager,
Group Strategy and has held a number of senior positions in the retail
bank across products, payments and the branch network. Previously,
he was a Partner at McKinsey & Co. in New York, specialising in retail and
commercial banking, wealth management, payments and general insurance.
Vittoria Shortt
Chief Executive and Managing
Director, ASB Bank Ltd
Appointed: February 2018
Priorities: Vittoria is responsible for leading the Group’s New Zealand banking
business, operating under the ASB brand. Her priorities are to provide leading
customer experiences and outcomes, harnessing new technology to provide
innovative solutions, and delivering programs that have a significant positive
impact for New Zealanders.
Experience: Vittoria joined the Bank in 2002 and has held various executive
and senior leadership positions, including Group Executive Marketing
and Strategy, Chief Marketing Officer of CBA, and Chief Executive Retail
at Bankwest. Vittoria started her career in corporate finance and mergers
and acquisitions with Deloitte and Carter Holt Harvey.
Karen O’Flynn
Group General Counsel and Group
Executive, Legal & Group Secretariat
Appointed: September 2023
Priorities: Karen is responsible for the Group’s legal, corporate governance,
Financial Accountability Regime Supervisory and SpeakUP teams. In addition
to advising the CEO and Board, her priorities include supporting her teams
in delivering sound advice which assists the Group in executing its strategy.
Experience: Karen joined the Commonwealth Bank in September 2023.
Prior to joining the Commonwealth Bank, Karen was a Partner of Clayton Utz
for 28 years, where she held a number of leadership positions including Chair
of the Clayton Utz Board from 2020 to 2023.
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OUR APPROACH TO CORPORATE GOVERNANCE
Mike Vacy-Lyle
Group Executive, Business Banking
Appointed: February 2020
Priorities: Mike is responsible for serving the banking needs of business,
corporate and agribusiness customers, and for the Bank’s online equities
trading platform, CommSec. Mike’s focus is on extending the Bank’s business
banking and payments capabilities, and on making banking simpler and better
for customers by providing market-leading service, products and technology.
Experience: Prior to joining the Bank in 2020, Mike was Chief Executive Officer
of FNB Commercial Banking in South Africa. He spent almost 20 years working
at FNB Commercial Banking holding various roles across finance, pricing,
product, capital management, sales and relationship management.
Nigel Williams
Group Chief Risk Officer
Appointed: November 2018
Priorities: Nigel is focused on ensuring our people manage risk well
to maintain the trust placed in the Group by our customers, shareholders
and the community. He is accountable for ensuring the effective governance
and management of all risk types – including credit, operational, compliance,
liquidity, financial crime and insurance risk.
Experience: Nigel has over 35 years of international banking experience,
having held directorships and executive business and risk management
leadership roles. Prior to joining the Bank in 2018, Nigel was the Chief
Risk Officer at ANZ.
Sinead Taylor
Chief Operations Officer
Appointed: October 2021
Priorities: Sinead is responsible for all banking, markets and Group regulatory
operations across CBA. Her priorities are to deliver exceptional customer
experiences through operational excellence.
Experience: Sinead has over 20 years banking experience leading teams
to deliver exceptional customer outcomes. Prior to her current role,
Sinead spent two years as Executive General Manager of Bankwest, following
six years in leadership roles across the business and retail bank. Sinead has
held a number of other executive roles at CBA in Global Markets, Strategy,
Marketing, Business and Corporate Banking. Prior to CBA, Sinead managed
strategy and marketing teams for top tier professional service firms in the UK
and Australia and has worked in publishing, radio production and broadcasting.
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ADDITIONAL INFORMATION
OVERVIEW
The Directors of the Commonwealth Bank of Australia present their report, together with
the Financial report of the Commonwealth Bank of Australia (the Bank) and of the Group,
being the Bank and its controlled entities, for the year ended 30 June 2024.
Principal activities
We serve more than 17 million customers with a focus on providing retail and commercial banking services predominantly
in Australia, and in New Zealand through our subsidiary ASB. Our products and services are provided through our divisions,
Retail Banking Services, Business Banking, Institutional Banking and Markets, and ASB New Zealand.
A review of the divisional operations and their results for the financial year ended 30 June 2024 can be found on pages 66–69.
Simpler, better foundations
We have undertaken and completed a number of transactions that are consistent with our strategy to focus on our core
banking business.
On 1 May 2024, the Group completed the sale of its 99% shareholding in PT Bank Commonwealth (PTBC) to PT Bank OCBC
NISP TbK (OCBC Indonesia), a subsidiary of Oversea Chinese Banking Corp (OCBC).
There have been no other significant changes in the nature of the principal activities of the Group during the financial year.
For further details, refer to Note 1.1 and Note 11.3 in the Financial report on pages 143 and 279, respectively.
Operating and financial review
The Operating and financial review section includes the information below as well as the information in the Overview section
on pages 2–9, Creating Value section on pages 10–97 and Financial performance section on pages 60–69.
Group profit
The Group’s statutory net profit after tax for the financial year ended 30 June 2024 was $9,394 million, a decrease
of $604 million or 6% on the prior year. Statutory net profit after tax from continuing operations for the financial year
ended 30 June 2024 was $9,481 million, a decrease of $615 million or 6% on the prior year. The decrease was driven
by a 2% reduction in total operating income and a 2% increase in operating expenses, partly offset by a 28% decrease
in loan impairment expense.
Statutory net profit after tax complies with the requirements of the Corporations Act 2001 (Cth), Australian Accounting
Standards and International Financial Reporting Standards (IFRS). The cash net profit after tax is management’s preferred
measure of the Group’s financial performance. It excludes items that are non-recurring in nature and are not considered
representative of the Group’s ongoing financial performance (non-cash items). We use the cash net profit after tax to present
a clear and consistent view of our financial performance from period to period.
The Group’s cash net profit after tax including discontinued operations for the year ended 30 June 2024 was $9,847 million,
a decrease of $243 million or 2% on the prior year. Excluding discontinued operations, cash net profit after tax for the year
ended 30 June 2024 was $9,836 million, a decrease of $236 million or 2% on the prior year. For further detail on the drivers
of cash net profit after tax, refer to the Financial performance section on pages 60–69.
Cash to statutory profit reconciliation
Statutory net profit after tax includes the following non-cash items:
Continuing operations 1
Total including
discontinued operations 1
FY24
FY23
FY24
FY23
Net profit after tax – cash basis
9,836
10,072
9,847
10,090
(Loss)/gain on acquisition, disposal, closure and demerger of businesses
and associates (classified as discontinued operations)
(372)
32
(470)
(84)
Hedging and IFRS volatility
17
(8)
17
(8)
Net profit after tax – statutory basis
9,481
10,096
9,394
9,998
1
Comparative information has been revised to reflect the change detailed in Note 1.1 in the Financial report.
98
Directors’ report
Non-cash items include:
• (Loss)/gain on acquisition, disposal, closure and demerger of businesses and associates (classified as discontinued
operations): Gains and losses on these transactions are inclusive of foreign exchange impacts, impairments, restructuring,
separation and transaction costs and cover both controlled businesses and associates classified as discontinued operations.
• Hedging and IFRS volatility: Hedging and IFRS volatility represents timing differences between fair value movements on
qualifying economic hedges and the underlying exposure. To qualify as an economic hedge, the terms and/or risk profile must
match or be substantially the same as the underlying exposure.
Assets and liabilities
Home loans increased $12 billion or 2%, reflecting our continued focus on retaining existing customers in a highly competitive
market coupled with strong growth in our new digital-only proprietary offering Unloan.
Business and corporate loans increased $5 billion or 2% driven by growth in Business Banking reflecting diversified growth
across a number of industries.
Deposits increased $18 billion or 2%, primarily driven by continued growth in savings and investment deposits reflecting
greater customer demand for higher yielding deposits.
Debt issues increased $22 billion or 18% reflecting funding requirements following the maturity of the RBA Term Funding Facility.
As at 1
Total Group assets and liabilities ($m)
30 Jun 24
30 Jun 23
% change
Home loans
664,701
652,218
2%
Consumer finance
16,762
17,042
2%
Business and corporate loans
266,025
261,512
2%
Total Group lending
947,488
930,772
2%
Other assets (including held for sale)
306,588
321,651
5%
Total assets
1,254,076
1,252,423
–
Deposits
881,621
863,295
2%
Debt issues
144,530
122,267
18%
Term funding from central banks
4,228
54,220
92%
Other liabilities
150,609
141,008
7%
Total liabilities
1,180,988
1,180,790
–
1
Comparative information has been revised to reflect the change detailed in Note 1.1 in the Financial report.
Further information and analysis of the financial performance of the Group for the financial year ended 30 June 2024 can be
found in the Financial performance section on pages 60–69 of this Annual Report. Details on our risk management processes,
material risks and approach to managing them, including a description of the material trends in our current external operating
context and more information on our business strategies can be found in the Overview (pages 2–9), Creating Value section
(pages 10–79), including the Managing our risks section (pages 70–79) of this Annual Report.
Other than the information included in the operating and financial review and throughout this Annual Report by cross
reference, information on other likely developments, business strategies and prospects for future financial years of the Group’s
operations has not been included in this report as it would be likely to result in unreasonable prejudice to the Group.
Dividends
Details of dividends paid and dividends determined are outlined in Note 8.4 in the Financial report on pages 221–222.
99
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Litigation and regulatory matters
A number of litigation proceedings against the Group are continuing. The proceedings include the defence of seven class
actions. These include two separate shareholder class action proceedings (judgment was determined in CBA’s favour on
10 May 2024 and the applicants have filed an appeal from that judgment), two class actions in relation to superannuation
products, two class actions related to financial advice (one of which had an initial trial in March 2024 with judgment reserved),
as well as a class action commenced in New Zealand against ASB Bank regarding disclosure of loan variations.
There are also ongoing matters where regulators or other bodies are investigating whether CBA, ASB or another Group entity
has breached laws, regulatory, or other obligations. Where a breach has occurred, regulators or other bodies may impose, or
apply to a Court for, fines and/or other sanctions, or may require remediation. The Group is also party to certain enforceable
undertakings and one compliance program with a regulator and continues to receive various notices and requests for
information from its regulators as part of both industry-wide and Group-specific reviews.
In addition to possible regulatory actions and reviews, there may also be financial exposure to claims by customers, third parties
and shareholders and this could include further class actions, customer remediation or claims for compensation or other remedies.
The outcomes and total costs associated with such regulatory actions and reviews, and possible claims remain uncertain.
The Board continues to monitor each of these proceedings and investigations. The Group also continues to engage with its
regulators and other bodies in relation to the matters under investigation.
For further information about some of the more significant litigation and regulatory matters referred to above, refer to Note 7.1 in the Financial
report on pages 208–212.
Change in state of affairs
The significant changes in the state of affairs of the Group during the financial year are:
• Changes in the nature of principal activities outlined in the Simpler, better foundations section on page 98.
• Changes to the Board as outlined in the Our approach to corporate governance section on pages 80–97.
Events subsequent to reporting date
The Directors have determined a fully franked final dividend of 250 cents per share amounting to $4,184 million. The Bank
expects the Dividend Reinvestment Plan (DRP) for the final dividend for the year ended 30 June 2024 will be satisfied in full
by an on-market purchase of shares of approximately $560 million.
On 14 August 2024, the Bank announced a 12 month extension of the on-market share buy-back of up to $1 billion of shares
announced on 9 August 2023 (of which $282 million was completed during the year ended 30 June 2024). The Bank reserves
the right to vary, suspend or terminate the buy-back at any time.
The Directors are not aware of any other matter or circumstance that has occurred since 30 June 2024, that has significantly
affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the
Group in subsequent financial years.
Environmental reporting
We are subject to the Federal Government’s National Greenhouse and Energy Reporting (NGER) scheme. The scheme makes
it mandatory for controlling corporations to report annually on greenhouse gas emissions, energy production and energy
consumption, if they exceed certain threshold levels. Our NGER submission is independently audited and submitted before
the deadline to ensure that the Group meets the NGER requirements.
We do not believe that we are subject to any other significant environmental reporting regulations under the law of the
Commonwealth or of a State or Territory of Australia.
For more information on our voluntary environmental reporting, see the Environmental section on pages 26–29 and our Sustainability
performance on pages 48–50. For further detail on our approach to climate change, refer to our 2024 Climate Report.
Modern slavery reporting
We are subject to Australia’s Modern Slavery Act 2018 (Cth) and as required by that legislation, we published our 2023 Modern
Slavery Statement (Statement) in December 2023. The Statement outlines the actions taken by the Group to identify, assess
and mitigate modern slavery and human trafficking risks in our operations and supply chain, over the financial year ended
30 June 2023. This disclosure builds upon our annual reporting for the UK Modern Slavery Act 2015, having published our first
Modern Slavery and Human Trafficking Statement in 2016. We remain focused on this critical issue and will continue to report
in line with legislative requirements.
For further detail on our disclosures, refer to our Modern Slavery and Human Trafficking statement at commbank.com.au/sustainabilityreporting
100
Directors’ report (continued)
Directors and Directors’ meetings
The Board of the Commonwealth Bank of Australia met 12 times during the year ended 30 June 2024. In addition, Directors
attended Board strategy sessions and special purpose committee meetings during the year.
The following table includes:
• names of the Directors holding office at any time during, or since the end of, the financial year; and
• the number of scheduled and unscheduled Board and Board Committee meetings held during the financial year for which
each Director was a member of the Board or relevant Board Committee and eligible to attend, and the number of meetings
attended by each Director.
All Directors may attend Board Committee meetings (with the exception of the Nominations Committee) even if they are not
a member of the relevant Committee. The table below excludes the attendance of those Directors who attended meetings
of Board Committees of which they are not a member.
Board
Committees
Scheduled
meetings
Unscheduled
meetings 1
Risk &
Compliance
Audit
People &
Remuneration
Nominations
Concurrent
Held 2 Attended
Held 3 Attended
Held 2 Attended
Held 2 Attended
Held 2 Attended
Held 2 Attended
Held 4 Attended
Director
Paul O’Malley
9
9
3
3
7
7
8
8
7
7
6
6
2
2
Matt Comyn
9
9
3
3
Genevieve
Bell AO 5
2
2
3
2
3
3
2
2
Lyn Cobley 6
9
9
3
3
5
5
6
6
2
2
Julie Galbo
9
9
3
3
7
7
8
8
2
2
Peter Harmer 7
9
9
3
3
8
8
7
7
4
4
2
2
Simon Moutter
9
9
3
3
7
7
7
7
2
2
Mary Padbury
9
9
3
3
7
7
6
6
2
2
Anne
Templeman-
Jones
9
9
3
3
7
7
8
8
2
2
Rob
Whitfield AM
9
9
3
3
7
7
8
8
6
6
2
2
1
Out of cycle Board meetings typically called for a special purpose that do not form part of the Board approved yearly planner.
2
The number of scheduled meetings held during the time the Director was a member of the Board or of the relevant committee.
3
The number of unscheduled meetings held during the time the Director was a member of the Board.
4
The number of concurrent meetings of the four Board Committees held during the time the Director was a member of the relevant Committee.
5
Genevieve Bell retired effective 31 October 2023.
6
Lyn Cobley was appointed as a member of the Audit and the Risk & Compliance Committees on 1 October 2023.
7
Peter Harmer was appointed as a member of the Nominations Committee on 1 November 2023.
Details of current Directors, their experience, qualifications, directorships of other listed entities and any special responsibilities (including Board
Committee memberships) and other external appointments, are set out in the Our approach to corporate governance section on pages 80–97.
101
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Options and share rights outstanding
There are no options over Bank shares on issue as at the date of this report. As at the date of this report, there are
1,031,251 share rights outstanding in relation to Bank ordinary shares and no employee options. Holders of outstanding
share rights in relation to the Bank’s ordinary shares do not have any rights under the share rights to participate in any share
issue or interest of the Bank.
Directors’ interests in contracts
A number of Directors have given written notices stating that they hold office in specified companies and accordingly
are to be regarded as having an interest in any contract or proposed contract that may be made between the Group
and any of those companies.
Directors’ and officers’ indemnity and insurance
Constitution
The Directors, as named on pages 90–93 of this report, and the Company Secretaries of the Bank, referred to below,
are indemnified under the Constitution of the Commonwealth Bank of Australia (the Constitution), as are all current
and former Directors and Executive Officers of the Bank (as defined in the Constitution).
The indemnity extends to such other officers or former officers of the Bank, or of its related bodies corporate, as the CBA
Board in each case determines (each, including the Directors and Company Secretaries, is defined as an ‘Officer’ for the
purpose of this section).
The Officers are indemnified by the Bank on a full indemnity basis and to the full extent permitted by law against all losses,
liabilities, costs, charges and expenses incurred by the Officer as an officer of the Bank or of a related body corporate.
Deeds of indemnity
An individual deed of indemnity, on substantially the same terms as those provided in the Constitution, has been provided
to each Director and Company Secretary of the Bank, the Australian based non-executive directors and company secretaries
of CBA subsidiaries and to each Group Executive.
The Bank has also executed an indemnity deed poll, which provides indemnification to certain other officers on substantially
the same terms as those provided in the Constitution. The Bank’s Directors, and other individuals described in the preceding
paragraph, rely on the terms of their individual deed of indemnity and not the indemnity deed poll.
The Deed Poll has been executed by the Bank in favour of each:
• secretary and senior manager of the Bank;
• director, secretary or senior manager of a related body corporate of the Bank;
• person who, at the request of the Bank or a related body corporate, acts as Director, secretary or senior manager of a body
corporate which is not a related body corporate of the Bank (in which case the indemnity operates only in excess of protection
provided by that body corporate); and
• person who, at the request of a related body corporate of the Bank, acts as a member of the compliance committee
of a registered scheme for which the related body corporate of the Bank is the responsible entity.
In the case of a subsidiary or partly-owned subsidiary of the Bank, where a director, company secretary or a senior manager
of that entity holds such a position as a nominee of or due to being nominated by an entity which is not a related body
corporate of the Bank, the indemnity deed poll will not apply to that person unless the Bank’s CEO has certified that the
indemnity will apply to that person.
Insurance
The Bank has, during the financial year, paid an insurance premium in respect of a Directors’ and Officers’ liability and
company reimbursement insurance policy for the benefit of the Bank and persons defined in the insurance policy who include
Directors, Company Secretaries, Officers and certain employees of the Bank and related bodies corporate. The insurance
is appropriate pursuant to section 199B of the Corporations Act 2001 (Cth). In accordance with commercial practice, the
insurance policy prohibits disclosure of the terms of the policy, including the nature of the liability insured against and the
amount of the premium.
102
Directors’ report (continued)
Proceedings on behalf of the Bank
No application has been made under section 237 of the Corporations Act 2001 (Cth) in respect of the Bank, and there
are no proceedings that a person has brought or intervened in on behalf of the Bank under that section.
Rounding and presentation of amounts
Commonwealth Bank is an entity to which ASIC Corporations Instrument 2016/191 (Instrument) dated 24 March 2016,
relating to the rounding of amounts in Directors’ reports and Financial reports, applies. Pursuant to this Instrument,
amounts in this Directors’ report and the accompanying financial report have been rounded to the nearest million dollars,
unless indicated otherwise.
Company secretaries
Karen O’Flynn was appointed Company Secretary of the Bank on 1 September 2023. Karen is also the Bank’s Group General
Counsel and Group Executive, Legal & Group Secretariat and her experience is set out on page 96.
Qualifications: BA, LLB.
Vicki Clarkson was appointed Company Secretary of the Bank on 3 March 2022. Vicki has extensive listed company
experience. Prior to joining the Bank, Vicki held senior legal, corporate governance and company secretary roles at Bank of
Queensland, Aurizon Holdings Limited, Flight Centre Limited and Shine Corporate Ltd. Vicki is a member of the Governance
Institute of Australia’s Legislative Review Committee.
Qualifications: BA, LLB, Grad. Dip. Legal Practice, Grad. Dip. Corp. Gov, FGIA, GAICD, FCIS.
103
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Remuneration
report
On behalf of the Board, I am pleased to
present the 2024 Remuneration Report.
For the 2024 financial year, our drive
for sustainable performance has
underpinned shareholder outcomes,
made gains in consumer customer
advocacy, delivered positive people
and cultural outcomes and a strong
reputation score, as measured
by RepTrak.
As a Board, we ensure executive
remuneration outcomes reflect
an appropriate balance of financial
and non‑financial performance, backed
by sound risk management. We made
adjustments to scorecard weightings
for the 2024 financial year, increasing
the weighting on shareholder measures
to 50% for the CEO and a number
of our Executive Leadership Team (ELT)
while maintaining a material weighting
on non‑financial performance.
In addition, the Board commissioned
an independent review of financial target
setting in the 2024 financial year to
evaluate market practice. We have also
continued to evolve our governance
approach to support robust and balanced
challenge of performance and risk
outcomes at our concurrent meeting,
with an elevated focus on the behaviours
that drive positive risk outcomes.
Financial performance
The Group Cash Net Profit After Tax
(NPAT) performance was above target
at $9,847 million, and our Profit After
Capital Charge (PACC) outcome was
below target at $5,558 million. The
Bank’s capital position remains well
above Australian Prudential Regulatory
Authority (APRA) requirements for
resilience, safety and confidence.
Total Shareholder Return (TSR) over the
period 1 July 2020 to 30 June 2024
was 112.22%.
Additional detail on our TSR
peer groups can be found in the
2021 Remuneration Report.
Our results demonstrate disciplined
execution of our strategic priorities,
and we are well positioned to meet our
customers’ needs while also investing
for the future.
The Board closely monitored
macroeconomic factors and the Group‘s
financial performance throughout the
2024 financial year, and modified our
approach to setting ‘Threshold’ and
‘Above Expectations’ performance
targets following the independent
review to ensure financial targets are
stretching and appropriate for the
market context in which they are set.
Non-financial performance
We believe that lead indicators
of sustainable future performance
and value creation are essential
to assessing and rewarding executives,
consistent with APRA’s position
on non‑financial measures.
Dear Shareholder
In the 2024 financial year, we supported
our customers and communities while
delivering sustainable returns to
shareholders, as reflected in our
remuneration outcomes.
In this section
Remuneration overview
106
1. Variable remuneration
outcomes for the
financial year ended
30 June 2024
115
2. Executive remuneration
framework in detail
117
3. Executive KMP
statutory remuneration
122
4. Risk and remuneration
adjustments
128
5. Non-Executive
Director arrangements
129
6. Loans and other
transactions
132
104
Most importantly, during the 2024
financial year, we maintained our top
ranking relative to the other major
banks in Consumer and Institutional
categories as measured by net
promoter score (NPS).
Our corporate reputation, as measured
independently by RepTrak, remains
strong relative to our peers.
Additional detail on our performance
outcomes can be found on page 110.
Gender pay gap and
improving representation
Our organisation‑wide median gender
pay gap of 29.9% was published by the
Workplace Gender Equality Agency
(WGEA) for the first time this year,
and reflects many factors influencing
the gender pay gap more broadly,
including the types of roles performed
by women, the seniority of those roles
and the composition of the workforce.
On an aggregate level, we have
achieved gender pay equity on a ‘like
for like basis’ – that is men and women
are paid equally for performing the
same or comparable work. We remain
dedicated to closing the gender pay
gap and promoting gender equality.
We are continuing to advance gender
representation across leadership roles,
and work with various external bodies
to support more women to enter the
workforce to help diversify Australia’s
talent pool.
Additional detail on our diversity, equity
and inclusion activities can be found
on page 33.
Remuneration framework
For the 2024 financial year, the Board
adjusted the ELT’s short‑term variable
remuneration (STVR) scorecard
weightings to create an appropriate
balance of individual and collective
measures, and reduce the number
of performance measures to ensure
a tighter focus on measurable
outcomes. For the CEO and Group
Executives of our customer‑facing
businesses and the Financial Services,
Technology and Operations support units,
financial measures in the STVR scorecard
were increased from 40% to 50%.
During the year, the Board undertook
a review and streamlined the concurrent
meetings of the Board Committees.
A thorough review of risk matters
is undertaken incorporating input
by the Group Chief Risk Officer and
Group Auditor with consideration
of both positive and negative risk
behaviours and outcomes, including
remuneration consequences where
justified. This is consistent with the
Group’s commitment to do the right
thing for our customers, people,
communities and shareholders.
For the 2024 financial year, progress
against the Environment & Social
framework has been incorporated
into our risk and reputation modifier.
The Board considered significant risk
matters, executive accountability and
remuneration adjustments during
the 2024 financial year. No upward
or downward adjustments were made
to Executive STVR due to reputation
or risk‑related matters.
Additional detail on risk and remuneration
adjustments can be found on page 128.
Performance and
remuneration outcomes
The Board considered financial and
non‑financial performance outcomes
both in the context of the 2024
financial year and over a multi‑year
period and approved:
• Executive KMP received no fixed
remuneration increases in the
2024 financial year.
• FY24 STVR outcomes ranging
between 77% and 84% of maximum,
with no downward adjustments for
risk matters.
• FY24 long‑term alignment
remuneration (LTAR) grants awarded
with no reduction, consistent with
the design and objective to reinforce
individual people & leadership and
strategy execution performance.
Final outcomes will be assessed
prior to vesting on 30 June 2027.
• Vesting of the FY21 LTAR award for
the first time since its introduction
in the 2021 financial year. The vesting
outcome was not reduced following
Board review of Executive conduct
and risk outcomes.
• The FY21 long‑term variable
remuneration (LTVR) performance
outcome of 100%, which reflects
TSR performance of 85th and 87.5th
percentile over the long term relative
to the two comparator groups. The
performance rights are not released
to the CEO and Group Executives until
the end of the relevant holding period.
FY24 realised remuneration for
the CEO and Group Executives
incorporates deferred STVR and
the FY20 LTVR vesting at 92.5%
on relative TSR, employee engagement
and trust and reputation performance
over the four‑year period ending
Looking forward
As the Bank continues to make progress
on building tomorrow’s bank today for
our customers, our priorities as a People
& Remuneration Committee remain
committed to ensuring our people and
remuneration strategies and practices
continue to attract and retain the best
talent, motivate our people to deliver
long-term sustainable performance and
reward them for doing the right thing.
We recognise that closing the
gender pay gap requires a long term
commitment across the Bank and
partnerships with government,
industry, education providers and
community groups to support more
girls and women to participate in the
workforce with skills highly sought
after in the Australian market.
The Board continues to monitor our
remuneration framework to ensure it
remains fit for purpose, delivers on our
remuneration principles, including to
attract and retain exceptional talent,
and reflects stakeholder perspectives.
I invite you to read the Remuneration
Report and welcome your feedback.
Simon Moutter
People & Remuneration
Committee Chair
30 June 2023 (92.1% for CEO ASB),
as reported in our 2023 financial year
Remuneration Report. The face value
of the LTVR award at vesting was
24.28% higher than at the start of the
performance period due to the increase
in share price during the period (from
$82.57 at allocation to $102.62).
The TSR over this same period
was 42.87%.
Additional detail on executive
remuneration outcomes can be
found on pages 110–111.
Non-Executive Director fees
The Board determined to increase
base fees for Board members (not
including the Board Chair) by 7.4%,
effective 1 January 2024 to reflect
external market movements. This was
the first increase to base fees for Board
members since the 2015 financial year.
There was no change to other Board
fees or the Board fee pool.
Additional detail on the Directors’
fees is provided on page 129.
105
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Our Executive remuneration framework
Designed to attract and retain exceptional talent, align with and deliver
sustainable shareholder returns and meet regulatory requirements.
Fixed Remuneration (FR)
Short-Term Variable Remuneration (STVR)
Purpose
Provides market competitive remuneration to attract
and retain high quality talent while reflecting role scope
and accountabilities.
Purpose
Varies remuneration outcomes in line with annual performance
achievement, with material weighting to financial and
non‑financial outcomes across shareholder, customer,
people & leadership and strategy execution measures.
Description
Base remuneration and superannuation (or KiwiSaver for the
CEO ASB), reviewed annually against relevant comparator
group remuneration benchmarks.
Description
Target opportunity of 75% of FR with maximum opportunity
of 94% of FR (125% of target STVR), based on balanced
performance scorecard, risk scorecard and values assessment.
For further information please see page 117.
For further information please see page 117.
Mix
FR: 30%
STVR
LTAR
LTVR
Mix
FR
SHARES:
14%
LTAR
LTVR
CASH:
14%
Instrument and deferral
CEO
Year 1
Cash
100%
CEO
Year 1
Cash
50%
Year 2
Deferred shares
25%
Year 3
25%
Group Executives and CEO ASB
Year 1
Cash
100%
Group Executives and CEO ASB
Year 1
Cash
50%
Year 2
Deferred shares
25%
Year 3
25%
Subject to in-year adjustments, malus and clawback.
Refer to page 117.
Our remuneration principles
Aligned with
shareholder
value creation
Market competitive
to attract and
retain exceptional
talent
Reward
sustainable
outperformance
Recognise the role
of non‑financial
drivers in
longer‑term
value creation
Simple and
transparent
Reflect the
Group’s strategy
and values
106
Long-Term Alignment Remuneration (LTAR)
Long-Term Variable Remuneration (LTVR)
Purpose
Drives collective focus on increasing the value of CBA
over time, and individual focus on people & leadership and
strategy execution.
Purpose
Varies remuneration outcomes in line with longer‑term
performance measures, with a focus on relative shareholder
returns to support sustainable long‑term shareholder value.
Description
Maximum opportunity of 70% of FR (subject to pre‑grant
and pre‑vest assessments, and restriction period) which
considers future financial factors and individual non‑financial
performance of people & leadership and strategy execution.
Description
Maximum opportunity of 70% of FR. Assessed on relative TSR,
measured against two equally‑weighted comparator groups:
a general ASX peer group and a financial services peer group,
subject to a holding period after a four‑year performance period.
For further information please see pages 118–119.
For further information please see pages 120–121.
Mix
FR
STVR
LTAR: 21%
LTVR
Mix
FR
STVR
LTAR
LTVR: 21%
CEO
Year 4
Restricted share units
50%
50%
Year 5
CEO
Year 4
Performance period
Holding period
Years 5 and 6
Group Executives and CEO ASB
Year 4
Restricted share units
100%
Group Executives and CEO ASB
Year 4
Performance period
Holding period
Year 5
Subject to malus and clawback. Refer to pages 118 and 120.
Mandatory Shareholding Requirement (MSR)
Our MSR promotes alignment of the interests of the CEO and Group Executives with those
of shareholders and supports sustained long‑term value creation for the Group.
The CEO must accumulate CBA shares equal to 300% of FR, and Group Executives and
the CEO ASB must accumulate shares equal to 200% of FR. All Executives have a five‑year
period from the date of their appointment to their respective roles, or from the date their
FR increases by 15% or greater, to meet their MSR.
Further details on Executive KMP shareholdings are provided on pages 112–113.
MSR as a proportion of FR
Group CEO
Group Executive and
CEO ASB
2x
3x
Pre‑vest assessment.
Performance assessment.
107
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Our Executive Key Management Personnel
The table below outlines the Executives who were Key Management Personnel (KMP) for the year ended 30 June 2024,
including each individual’s appointment and cessation date where applicable. KMP are defined as persons having authority
and responsibility for planning, directing and controlling the activities of an entity, directly or indirectly, including any Director
(whether Executive or otherwise) of that entity.
Name
Position
Appointment
Date
Cessation
Date
Term as KMP
CEO
Matt Comyn
Managing Director and Chief Executive Officer
9 April 2018
–
Full year
Current Group Executives and CEO ASB
Alan Docherty
Group Chief Financial Officer
15 October 2018
–
Full year
Andrew Hinchliff Group Executive, Institutional Banking and Markets
1 August 2018
–
Full year
Sian Lewis
Group Executive, Human Resources
1 August 2018
–
Full year
Gavin Munroe
Group Chief Information Officer
14 November 2022
–
Full year
Vittoria Shortt
Chief Executive Officer and Managing Director of
ASB (CEO ASB)
3 February 2018
–
Full year
Angus Sullivan
Group Executive, Retail Banking Services
1 July 2018
–
Full year
Mike Vacy‑Lyle
Group Executive, Business Banking
31 January 2020
–
Full year
Nigel Williams
Group Chief Risk Officer
5 November 2018
–
Full year
Former Group Executive
David Cohen
Deputy Chief Executive Officer
5 November 2018
31 December 2023
Part year
Executive KMP exit
David Cohen ceased his KMP role effective 31 December 2023 by mutual agreement as announced to the market on
22 November 2023. David’s exit arrangements were in accordance with his employment contract, applicable law and Group
Remuneration Policy. Upon his exit, David received a contractual severance payment 1. No payments were made in lieu of notice
of termination.
David is eligible for a pro‑rated FY24 STVR award, pro‑rated FY24 LTAR award and pro‑rated FY24 LTVR award.
The pro‑rated STVR deferral is in cash and aligned to the requirements of the Financial Accountability Regime (FAR) 2.
As a good leaver, unvested deferred awards remain on‑foot 3 to be vested per the original vesting schedule to allow for the
review of, and adjustment for, risk or conduct in the future if required, subject to Board discretion.
1
David Cohen’s contractual severance pay is part of grandfathered arrangements where Group Executives were eligible for severance payments of six months’
base remuneration if their employment is terminated by the Group, other than for misconduct or unsatisfactory performance.
2 Under FAR, deferred remuneration obligations under the Banking Executive Accountability Regime (BEAR) continue to apply to remuneration arrangements
in place prior to the first financial year that begins after 15 September 2024. In line with BEAR, any payment determined and paid in the ordinary course
is subject to performance and Board risk and reputation review and is paid 60% in cash with the remaining 40% deferred as cash, vesting at least four years
after the decision is made to make the relevant award.
3
No accelerated or automatic vesting upon ceasing employment. The on‑foot deferred awards will be assessed in the ordinary course at the end of the
vesting period related to each award (as applicable). Final deferred award outcomes will be subject to performance (where applicable), and Board risk and
reputation review. Deferred awards continue to be subject to malus and clawback.
108
CBA Board
Risk & Remuneration Review Committee
Management committee that advises the Group CRO on material
risk matters, including any that may impact remuneration
outcomes for Executive General Managers and below levels.
Independent Remuneration Consultant
The People & Remuneration Committee may engage
external advisors to provide information to assist the
Committee in making remuneration decisions.
Board
Committees
Concurrent
meetings are held to
determine CEO and
Group Executive
risk, performance
and remuneration
outcomes.
People & Remuneration
Committee
Oversees CBA’s remuneration
framework and assists the
Board to ensure the Group’s
remuneration strategy,
policies and practices are
appropriate and effective.
Audit Committee
Assesses and advises the
People & Remuneration
Committee of any audit
matters which may impact
collective and/or individual
remuneration outcomes.
Nominations
Committee
Considers and reviews
matters relevant to evaluating
the performance of the CEO
and reports the evaluation to
the People & Remuneration
Committee and the Board.
Risk & Compliance
Committee
Advises the People &
Remuneration Committee of
material risk matters which
may impact collective and/or
individual remuneration
outcomes.
People & Remuneration Committee and Board oversight
The People & Remuneration Committee is the governing body for developing, monitoring and assessing the remuneration
strategy and framework across CBA on behalf of the Board, ensuring that these are appropriate and effective. The role of the
People & Remuneration Committee is to review, challenge, assess and, as appropriate, endorse the recommendations made
by management for Board approval. The Board reviews, challenges, applies judgement and, as appropriate, approves the
People & Remuneration Committee’s recommendations.
The People & Remuneration Committee met formally seven times during the 2024 financial year with the following members
(as at 30 June 2024): Simon Moutter (Chair), Peter Harmer, Paul O’Malley, Mary Padbury and Genevieve Bell (up until 31 October
2023). The responsibilities of the People & Remuneration Committee are outlined in its Charter, which is reviewed annually.
The Charter is available at commbank.com.au/peopleandremuneration
As part of the performance and risk review, and to support the determination of remuneration outcomes for the CEO and
Group Executives, the People & Remuneration Committee meets concurrently with the Risk & Compliance, Audit, and
Nominations Committees in February and June. These concurrent meetings provide an opportunity for the Committees
to review and discuss relevant risk and audit matters that may warrant consideration in the People & Remuneration
Committee’s determination of remuneration outcomes. Information provided to the concurrent meetings supports
determination of collective and/or individual remuneration adjustments and includes risk scorecard outcomes for the CEO
and Group Executives, details of material risk matters presented by the Group CRO and outcomes of internal audit reviews
conducted during the year presented by the Group Auditor.
The concurrent meeting process was reviewed during the 2024 financial year to consider the appropriate meeting structure
to support the determination of appropriate remuneration outcomes and meet regulatory requirements. Following the review,
the concurrent meeting agenda was streamlined to primarily focus on key risk and audit matters relevant to the CEO and each
Group Executive’s performance and remuneration outcomes to ensure due consideration is given to both exceptional and poor
risk and audit outcomes and the context in which those outcomes occurred.
The Risk & Remuneration Review Committee, a management committee that advises the Group CRO, oversees assessment
of accountability for material risk matters, including those impacting CBA’s reputation, and application of remuneration
adjustments as appropriate for employees at and below the Executive General Manager level.
In line with New Zealand regulatory requirements, the performance and remuneration arrangements and outcomes for the
CEO ASB are determined and approved by the Board of ASB.
External advisors
During the 2024 financial year, external advisors were engaged to provide information to the People & Remuneration
Committee to assist with making remuneration decisions. The People & Remuneration Committee did not seek or receive
any remuneration recommendations from external advisors in the 2024 financial year.
Remuneration governance
CBA’s remuneration governance framework
109
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Remuneration outcomes
30 Jun 20
30 Jun 21
30 Jun 22
30 Jun 23
30 Jun 24
Fixed remuneration (FR) increase 1 (average %)
1.3%
5.1% 2
3.6%
1.3%
0%
STVR outcome (average % of maximum)
60%
85% 3
85%
88%
81%
LTAR vesting outcome (% of maximum)
n/a
n/a
n/a
n/a
100% 4
LTVR performance outcome (% of maximum)
84%
87.5%
100%
92.5%
100% 4
1
Average increases for Key Management Personnel (KMP) excluding promotions.
2
Increased FR in combination with the reduced total remuneration opportunity and rebalanced pay‑mix. Underlying FR average increase 1.4%.
3
Maximum STVR opportunity reduced from 150% to 125% of target for 2021 financial year impacting year‑on‑year comparisons of STVR outcome as a % of maximum.
4
The FY21 LTAR is the first LTAR grant under the executive remuneration framework introduced in FY21.
Measures
Financial
Executive remuneration
outcomes reflect sustained
financial performance,
with consistent operational
execution and value delivery for
shareholders. Financial targets
are set by the Board considering
Group strategic priorities,
the economic environment and
market expectations. Following
a review, the method for setting
financial performance targets
for FY24 was adjusted to reflect
better market practices.
Group performance and remuneration
Our remuneration outcomes, including STVR, LTAR and LTVR, reflect sustained performance across both financial
and non‑financial measures. The graphs and table below illustrate the relationship between Executive remuneration
outcomes and the Group’s performance over the past five financial years.
24
23
22
21
20
24
23
22
21
20
24
23
22
21
20
24
23
22
21
20
24
23
22
21
20
Group PACC
($m)
Relative TSR 2:
four-year period
to 30 Jun (%)
Share price as at
30 Jun 3 ($)
Dividends per
share ($)
Absolute TSR %
Percentile ranking
Continuing Cash NPAT and PACC
Discontinued Cash NPAT and PACC
9,847
100.27
6,027
5,558
4.50
70
85
127.38
4.65
99.87
90.38
3,950
3,942
3.50
3.85
75
75
112.22
59.32
42.87
69.42
3,882
2.98
65
51.85
16.53
Group Cash NPAT 1
($m)
10,182
8,801
9,708
7,407
2 Percentile ranking relative to general ASX peer group. The percentile
ranking relative to the financial services peer group was 87.5 for FY24.
3 CBA opening share price 1 July 2019 was $83.50.
1 Restated as disclosed in Note 1.1
in the financial statements.
Non-financial
Executive remuneration outcomes reflect
non‑financial performance in customer, people
and leadership, strategy execution, risk and
reputation and values.
Targets are set to maintain or increase a leading
position relative to peers or absolute NPS levels.
This supports alignment with shareholder
interests as we advance our strategic priorities and
create sustainable value for our customers, people
and shareholders. Focusing on non‑financial
performance (in addition to financial performance)
ensures compliance with APRA Prudential
Standard CPS 511 requirements.
Further details can be found on page 115.
24
23
22
21
20
24
23
22
21
20
24
23
22
21
20
People (%) 2
Diversity (%)
Customers (NPS rank) (#) 1
44
79
42
43
78
80
41
81
IB&M
Women in Executive
Manager and
above roles
Employee
Engagement
Index
Consumer NPS
Business NPS
1
2
Rank
3
4
84
45
1 Represents June NPS outcome
for the relevant year.
2 FY24 outcomes reflect a revised survey format.
Refer to Sustainability Performance on page 52
for further details.
Executive KMP remuneration
110
Long-term variable remuneration
(LTVR)
Long-term alignment remuneration
(LTAR)
CEO remuneration
Matt Comyn was appointed to the CEO role effective 9 April 2018. For the 2024 financial year, the CEO:
• Did not receive an increase to fixed remuneration and total target remuneration remained unchanged.
• Received variable remuneration relating to performance over the five‑year period from 1 July 2019 to 30 June 2024.
Variable remuneration
Outcome 1
Performance Period
Cash STVR
50% of FY24 Award
79%
1 July 2023 to 30 June 2024
Deferred STVR
25% of FY22 Award
87%
1 July 2021 to 30 June 2022
25% of FY21 Award
87%
1 July 2020 to 30 June 2021
LTVR
100% of FY20 Award
92.5%
1 July 2019 to 30 June 2023
• Outcomes reflect performance (as a % of maximum) against financial and non‑financial measures.
• FY24 total received remuneration is $8.98 million with 72% ($6.48 million) of total remuneration relating to performance,
including awards deferred into equity from prior performance periods. See page 114 for further detail.
• Share price growth on deferred awards contributed $1.10 million or 12% of FY24 total remuneration received 2.
• FY24 statutory remuneration is $7.17 million, which reflects the accounting value of Matt Comyn’s awards prepared in line
with Australian Accounting Standards. See pages 122–123 for further detail.
1
STVR outcome reflects % of maximum performance opportunity. LTVR outcome reflects % of maximum vesting opportunity.
2
The market value of FY22 deferred STVR shares at grant was $96.05 and $101.35 at vesting. The market value of FY21 deferred STVR shares at grant was
$101.00 and $101.35 at vesting. The market value of the FY20 LTVR performance rights at grant was $80.34 and $104.47 at vesting.
FY24 outcomes
CEO remuneration
STVR % of maximum 78.6%
Group Executives (GEs)
and CEO ASB remuneration
STVR % of maximum
76.7% to 83.6%
Short-term variable remuneration
(STVR)
FY21 LTVR reached the end of its
performance period on 30 June 2024.
Performance outcome: 100%
CEO: Performance rights are subject
to a further holding period – 50%
for two years and 50% for three
years (to 30 June 2026 and 30 June
2027 respectively).
GEs and CEO ASB: Performance
rights are subject to a further holding
period – 50% for one year and 50%
for two years (to 30 June 2025 and
30 June 2026 respectively).
The LTAR vested for the first time
with no reduction.
CEO: 50% of the FY21 LTAR
grant remains in restriction until
30 June 2025.
GEs and CEO ASB: restriction period
ends 30 June 2024 for the FY21
LTAR grant.
FY24 remuneration at a glance
111
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Key
FR
STVR – Cash
STVR – Deferred
LTVR
Progress against minimum
shareholding requirement
Meets
964%
300%
Shareholding requirement
Current shareholding
Progress against minimum
shareholding requirement
Meets
564%
200%
Shareholding requirement
Current shareholding
Progress against minimum
shareholding requirement
Meets
873%
200%
Shareholding requirement
Current shareholding
Progress against minimum
shareholding requirement
Meets
723%
200%
Shareholding requirement
Current shareholding
1
Both 2024 and 2023 refer to the relevant financial year, and include fixed remuneration received, STVR cash portion paid, and equity awards which have vested
during the year, including deferred STVR and LTVR awards. For 2024 this relates to the 2020 LTVR and for 2023 it relates to the 2019 LTVR.
Executive KMP remuneration snapshot
Matt Comyn Managing Director and Chief Executive Officer ($000)
Term as KMP:
full year
2024 remuneration
received
2,500
1,004
4,552
8,977
921
1
2023 remuneration
received
2,500
1,304
5,519
10,426
1,103
1
Alan Docherty Group Chief Financial Officer ($000)
2024 remuneration
received
Term as KMP:
full year
1,150
432 455
2,121
4,158
1
2023 remuneration
received
1,150
483
536
2,571
4,740
1
Andrew Hinchliff Group Executive, Institutional Banking and Markets ($000)
2024 remuneration
received
Term as KMP:
full year
1,200
467 457
2,173
4,297
1
2023 remuneration
received
1,200
496
487
2,508
4,691
1
Sian Lewis Group Executive, Human Resources ($000)
2024 remuneration
received
Term as KMP:
full year
950
349370
1,759
3,428
1
2023 remuneration
received
950
385 438
2,070
3,843
1
The Executive KMP remuneration snapshot provides details of remuneration received 1 during the financial years ended
30 June 2024 and 30 June 2023. This differs from the statutory remuneration table on pages 122–123, which presents
remuneration in accordance with accounting standards (i.e. on an accruals basis). The basis of preparation is noted on page 114,
excluding any one‑off awards.
Progress against minimum
shareholding requirement
On track
197%
200%
Shareholding requirement
Current shareholding
Gavin Munroe Group Chief Information Officer ($000)
2024 remuneration
received
Term as KMP:
full year
1,200
462
1,662
1
2023 remuneration
received
753
308
1,061
1
112
Key
FR
STVR – Cash
STVR – Deferred
LTVR
Progress against minimum
shareholding requirement
Meets
1,049%
200%
Shareholding requirement
Current shareholding
Progress against minimum
shareholding requirement
Meets
656%
200%
Shareholding requirement
Current shareholding
Progress against minimum
shareholding requirement
Meets
890%
200%
Shareholding requirement
Current shareholding
Progress against minimum
shareholding requirement
Meets
568%
200%
Shareholding requirement
Current shareholding
2
New Zealand dollar amounts have been converted to Australian dollars. For the CEO ASB, the FY20 LTVR award vested at 92.12% with trust and reputation
at 88.46%.
2024 remuneration received includes vesting of the FY20 LTVR award. As reported in 2023, the FY20 LTVR award vested at
92.5% reflecting sustained strong financial and non‑financial performance for the period from 1 July 2019 to 30 June 2023
being: relative TSR at the 70th percentile, Employee Engagement of 84% and RepTrak score of 100th percentile (peer group
made up of 16 largest consumer facing ASX companies for CBA and 13 companies being the four largest financial institutions
in New Zealand and nine largest New Zealand institutions for ASB. The positive TSR gateway was met for non‑financial
performance measures; CBA’s absolute TSR for the four‑year performance period to 30 June 2023 was 42.87%.
Vittoria Shortt Chief Executive Officer and Managing Director of ASB ($000)
2024 remuneration
received
Term as KMP:
full year
1,067
416
4,712
1,2
1,990
1,239
2023 remuneration
received
1,056
420
1,938
1,2
462
Angus Sullivan Group Executive, Retail Banking Services ($000)
2024 remuneration
received
Term as KMP:
full year
1,300
509 534
2,276
1
4,619
2023 remuneration
received
1,300
542
699
2,634
1
5,175
Mike Vacy-Lyle Group Executive, Business Banking ($000)
2024 remuneration
received
Term as KMP:
full year
1,225
455 504
2,276
4,460
1
2023 remuneration
received
1,225
574 381
2,180
1
Nigel Williams Group Chief Risk Officer ($000)
2024 remuneration
received
Term as KMP:
full year
1,450
521
5,027
1
556
2,500
2023 remuneration
received
1,450
571
5,699
1
647
3,031
113
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Remuneration received during the year by Executive KMP
The remuneration outcomes table below provides a summary of the remuneration received by the Executives in their
KMP roles during the financial year ended 30 June 2024. It complements the Executive KMP remuneration snapshots on
pages 112–113, which present remuneration received, and is prepared in accordance with the basis of preparation noted
below, including any one‑off awards. All remuneration presented in this report is in Australian dollars.
Fixed
remuneration
Cash STVR
Total cash
payments
Deferred
awards 1
Total
remuneration
received
Previous
years' awards
forfeited or
lapsed
a
b
c = a + b
d
e = c + d
f
CEO
Matt Comyn
30 Jun 24
2,500,000
920,860
3,420,860
5,556,027
8,976,887
(369,022)
30 Jun 23
2,500,000
1,102,500
3,602,500
6,823,244
10,425,744
–
Current Group Executives and CEO ASB
Alan Docherty
30 Jun 24
1,150,000
432,264
1,582,264
2,575,643
4,157,907
(171,889)
30 Jun 23
1,150,000
483,000
1,633,000
3,107,769
4,740,769
–
Andrew Hinchliff
30 Jun 24
1,200,000
467,280
1,667,280
2,629,590
4,296,870
(176,096)
30 Jun 23
1,200,000
496,350
1,696,350
2,994,968
4,691,318
–
Sian Lewis
30 Jun 24
950,000
349,072
1,299,072
2,128,793
3,427,865
(142,539)
30 Jun 23
950,000
384,750
1,334,750
2,507,407
3,842,157
–
Gavin Munroe
30 Jun 24
1,200,000
462,308
1,662,308
154,152
1,816,460
–
30 Jun 23
752,877
307,739
1,060,616
465,937
1,526,553
–
Vittoria Shortt 2
30 Jun 24
1,067,320
416,255
1,483,575
3,228,387
4,711,962
(170,247)
30 Jun 23
1,055,838
419,696
1,475,534
462,068
1,937,602
–
Angus Sullivan
30 Jun 24
1,300,000
509,218
1,809,218
2,810,144
4,619,362
(184,511)
30 Jun 23
1,300,000
542,100
1,842,100
3,332,837
5,174,937
–
Mike Vacy‑Lyle
30 Jun 24
1,225,000
455,425
1,680,425
2,780,290
4,460,715
(184,511)
30 Jun 23
1,225,000
574,219
1,799,219
381,145
2,180,364
–
Nigel Williams
30 Jun 24
1,450,000
521,402
1,971,402
3,056,226
5,027,628
(202,675)
30 Jun 23
1,450,000
570,938
2,020,938
3,678,469
5,699,407
–
Former Group Executive
David Cohen 3
30 Jun 24
628,415
290,521
918,937
2,990,309
3,909,246
(201,238)
30 Jun 23
1,250,000
430,313
1,680,313
3,582,379
5,262,692
–
1
For Gavin Munroe this represents the portion of his cash and equity one‑off awards which vested in the 2024 financial year. Gavin commenced as a KMP on 14
November 2022, FY23 remuneration reflects time in role.
2
Vittoria Shortt has an additional payment of $12,488 of KiwiSaver payable on her cash STVR component (FY23 amount was $12,591). Vittoria's remuneration
is paid in New Zealand dollars. The values shown are impacted by movements in exchange rates.
3
David Cohen ceased being a KMP on 31 December 2023 and his remuneration reflects the time he was a KMP.
Basis of preparation
Cash
payments
(a) Fixed remuneration: Base remuneration plus superannuation paid for the period as KMP. For the CEO ASB,
contributions are made in line with the KiwiSaver employer contribution requirements.
(b) Cash STVR:
• For 2024: 50% of the 2024 financial year STVR (relates to performance during the 12 months to 30 June 2024).
• For 2023: 50% of the 2023 financial year STVR (relates to performance during the 12 months to 30 June 2023).
Vesting
of prior
year awards
(d) Deferred awards: The value of all deferred awards that vested during the period as KMP. The value for
equity awards shown is based on the volume weighted average closing price (VWACP) of the Group’s
ordinary shares over the five trading days preceding the vesting date.
For the 2024 financial year, the awards vested values include:
• the tranche of deferred STVR from the 2022 and 2021 financial years and 2019 financial year for the
CEO ASB;
• the 2020 LTVR award; and
• one‑off equity and one‑off cash awards.
Awards
forfeited
or lapsed
(f) Previous years’ awards forfeited or lapsed: The value of all unvested deferred equity awards that were
forfeited or lapsed during the 2024 financial year as the performance or risk and reputation conditions
were not met. The value shown is based on VWACP of the Group’s ordinary shares over the five trading
days preceding the date of forfeiture or lapse.
114
Remuneration report (continued)
1.
Variable remuneration outcomes for the financial year ended
30 June 2024
CEO short-term variable remuneration (STVR) performance outcomes
Reflective of Group financial and non‑financial performance, the CEO’s 2024 financial year STVR outcome is: 78.6%
of maximum (98.2% of target).
Measure, rationale and commentary
Weight
Scorecard result
% of STVR
maximum
Threshold
50%
Target
100%
Above
Expectations
125%
Shareholder
Delivery of disciplined financial performance with a continued focus
on execution of the Group’s strategic priorities in a challenging
economic landscape:
• Group cash NPAT – above Target (Actual: $9,847 million)
• Group underlying PACC – below Target (Actual: $5,558 million).
25%
9,272
9,672
10,072
22.2%
25%
5,253
5,889
6,525
14.8%
Customer
NPS outcomes for Consumer, Business and Institutional customers,
with reference to complaints remediation:
• Consumer and IB&M NPS ranked #1 against major bank peers for
12 months, with BB holding #1 position for 11 months, declining to
#2 in June.
15%
10.8%
People & Leadership
Group Leadership measure results:
• Employee engagement remains high at 84%
• Overall improvement on the identification, assessment and activation
of talent across the Group
• Developing critical capabilities and building a diverse culture with
45% women in leadership roles.
10%
8.8%
Strategy Execution
Strong progress on the delivery of Group strategic priorities, including:
• Policy leadership and continued advocacy and engagement with
government on issues including AI, scams and payments reform
• Ongoing innovation of products and services with achievement of #1
NPS for Consumer mobile and Business digital apps
• Technology strategy implementation enabling improvements
in platforms, stability and resilience; deployment of applications at
scale and speed while maintaining systems availability for customers
• Progress in line with our sustainability commitments
• Industry leading risk management practices, disciplined capital
management and strengthened balance sheet settings.
25%
22.0%
Overall CEO scorecard STVR outcome
78.6%
Risk and reputation assessment
• Leadership of risk culture
• Progress against the Environmental & Social framework
• Risk and Reputation: RepTrak Score
Fully met
No
adjustment
Values assessment
• Demonstrated all individual and leadership guidelines within the Group’s Values
• Continued to provide national industry leadership
Exceptionally
demonstrated
No
adjustment
Overall CEO STVR scorecard outcome
78.6%
115
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Executive short-term variable remuneration (STVR) performance outcomes
The following table provides the 2024 financial year STVR outcomes for Executives for the period they were KMP.
The minimum potential outcome is zero.
STVR actual
STVR target
STVR
maximum
Total
Cash 1
Deferred
STVR actual
as a %
of STVR
target 2
STVR actual
as a %
of STVR
maximum 2
$
$
$
$
$
%
%
CEO
Matt Comyn
1,875,000
2,343,750
1,841,719
920,860
920,859
98%
79%
Current Group Executives and CEO ASB
Alan Docherty
862,500
1,078,125
864,527
432,264
432,263
100%
80%
Andrew Hinchliff
900,000
1,125,000
934,560
467,280
467,280
104%
83%
Sian Lewis
712,500
890,625
698,143
349,072
349,071
98%
78%
Gavin Munroe
900,000
1,125,000
924,615
462,308
462,307
103%
82%
Vittoria Shortt 3
800,490
1,000,613
832,510
416,255
416,255
104%
83%
Angus Sullivan
975,000
1,218,750
1,018,436
509,218
509,218
104%
84%
Mike Vacy‑Lyle
918,750
1,148,438
910,849
455,425
455,424
99%
79%
Nigel Williams
1,087,500
1,359,375
1,042,804
521,402
521,402
96%
77%
Former Group Executive
David Cohen 4
471,311
589,139
484,202
290,521
193,681
103%
82%
1
Cash amounts will be paid in or around September 2024 for Australian‑based Executives.
2
The percentage of 2024 financial year STVR forfeited (as a % of STVR target and maximum respectively): Matt Comyn 2% and 21%, Alan Docherty 0% and
20%, Andrew Hinchliff 0% and 17%, Sian Lewis 2% and 22%, Gavin Munroe 0% and 18%, Vittoria Shortt 0% and 17%, Angus Sullivan 0% and 16%, Mike
Vacy‑Lyle 1% and 21%, Nigel Williams 4% and 23%, David Cohen 0% and 18%.
3
Vittoria Shortt's remuneration is paid in New Zealand dollars. The values shown are impacted by movements in exchange rates.
4
David Cohen ceased being a KMP on 31 December 2023 and his remuneration reflects the time he was KMP. The deferred portion of David Cohen's 2024
STVR was deferred into cash in line with the Financial Accountability Regime (FAR) requirements.
Long-term alignment remuneration (LTAR) pre-grant assessment outcomes
The 2024 financial year LTAR awards were granted with no downward adjustment. The CEO LTAR is delivered in two equal
tranches and is subject to a pre‑vest assessment at the end of a four and five‑year restriction period ending 30 June 2027
and 30 June 2028 respectively. The LTAR for Group Executives and CEO ASB is subject to a pre‑vest assessment at the end
of a four‑year restriction period ending 30 June 2027.
The following table outlines the pre‑grant assessment criteria and outcomes.
Pre-grant assessment
Outcome
Forward‑looking financial considerations
Met
Threshold level individual non‑financial performance
Met
Board discretion to adjust grant value downwards
No adjustment
Pre‑grant assessment outcome
No downward adjustment
Refer to page 119 for LTAR pre-grant assessment.
Long-term variable remuneration (LTVR) performance outcomes
The 2021 financial year LTVR award reached the end of its four‑year performance period on 30 June 2024. The performance
outcome was 100% for the CEO and Group Executives, including CEO ASB. CBA’s performance outcome for the general ASX
peer group was 100% and the financial services peer group was 100%. The performance rights that remain after performance
test are subject to further holding periods for the CEO and Group Executives (including CEO ASB).
Performance measure
Percentage
Percentile ranking
Performance
outcome
Relative TSR (general ASX peer group)
50%
85th percentile ranking relative to the peer group
100%
Relative TSR (financial services peer group)
50%
87.5th percentile ranking relative to the peer group
100%
Refer to page 99 of the 2021 Remuneration Report for the 2021 financial year LTVR award general ASX and financial services peer groups.
116
Remuneration report (continued)
2.
Executive remuneration framework in detail
Fixed remuneration
Fixed remuneration (FR) comprises base remuneration (i.e. cash salary) and superannuation (KiwiSaver for the CEO ASB).
FR is delivered in accordance with contractual terms and conditions of employment and is reviewed annually against relevant
comparator group remuneration benchmarks. As part of the benchmark, the Group’s size, scale and complexity relative to the
comparator group are considered.
Short-term variable remuneration (STVR)
The table below outlines key features of the 2024 financial year STVR award for the CEO and all Executives. Refer to page 127
for treatment of STVR on cessation of employment.
Features
Approach
Purpose
Varies remuneration outcomes in line with annual performance achievement, with material
weighting to financial and non‑financial outcomes across shareholder, customer, people
& leadership and strategy execution measures, incorporating both risk scorecard and values
assessments. Recognises both the ‘what’ and the ‘how’ of performance.
Participants
CEO, Group Executives and CEO ASB
Opportunity
Target STVR: 75% of FR
Maximum STVR: 94% of FR (125% of target STVR)
Performance measures
and weightings
Individual STVR outcomes are determined on the basis of Group (or ASB for the CEO ASB)
performance and individual performance through a balanced scorecard. The performance
measures comprise a mix of financial and non‑financial metrics linked to Group and business
unit targets, aligned to the Group’s strategy with the weightings varied by role. More information
on the CEO’s STVR scorecard can be found on page 115.
Non-financial
(including customer,
Financial
leadership and strategy)
CEO and business unit Group Executives 1
50%
50%
Support unit 2 Group Executives
40%–50%
50%–60%
Group CRO
20%
80%
CEO ASB 3
50%
50%
Risk and values
assessment
Performance outcomes determined through assessment of the balanced scorecard are subject
to the following gate/modifiers:
• Risk and Reputation 4: the Board 5 has discretion where appropriate to adjust Executive STVR
outcomes through the Executive risk scorecard. Executive risk scorecard assessments include
consideration of: risk culture and leadership; risk strategy/appetite; incidents and issues; the risk
and control environment; and risk milestones. The Risk and Reputation modifier also includes
consideration of Trust and Reputation outcomes that may warrant an adjustment to the Risk and
Reputation assessment. In FY24, progress against the Environment & Social Framework (E&S)
was introduced to the Risk and Reputation modifier to provide a more direct link to remuneration.
• Values: the Board 5 has the discretion to adjust Executive STVR outcomes on the basis
of an assessment of behaviours aligned with our Group values, where appropriate.
Calculation of awards
STVR awards for all Executives are calculated as follows:
Fixed
remuneration
$
Target STVR
opportunity
%
Performance
result % 6
Risk and
Reputation
result
Values
result
Value of
adjusted
STVR award
$
=
x
x
x
x
Opportunity
Risk and Reputation and
Values assessment
Scorecard
outcome
Final
outcome
Deferral
50% of the STVR award is deferred and delivered in deferred shares that vest in equal tranches over
one and two years. Deferred STVR shares have rights to dividends paid during the deferral period.
All deferred STVR awards are subject to Board 5 risk and reputation review prior to vesting
and continuous service. The Board also retains discretion to apply malus or clawback
if considered appropriate.
1
Excluding support unit Group Executives, Group CRO and CEO ASB.
2
Includes Financial Services, Group Strategy, Human Resources, Legal and Group Secretariat, Marketing and Corporate Affairs, Operations and Technology.
3
The Financial category comprise a Risk and climate measure.
4
For the CEO ASB reputation is not included in the modifier as it is contained in the Customer measures of the scorecard.
5
‘Board’ is to be read as ASB Board in respect of discretion for the CEO ASB’s STVR outcomes.
6
The Board retains discretion to adjust scorecard outcomes.
117
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Long-term alignment remuneration (LTAR)
The table below outlines key features of the 2024 financial year LTAR for the Executives. Refer to page 127 for treatment
of LTAR on cessation of employment. The LTAR was introduced in the 2021 financial year to retain an appropriate focus on
both financial and non‑financial outcomes and drive collective absolute focus on the value of the Group over time. The LTAR
is subject to pre‑grant and pre‑vest assessments.
Feature
Approach
Purpose
Drives collective focus on increasing the value of CBA over time, and individual focus on sustained
leadership and strategy execution performance. The LTAR pre‑grant and pre‑vest assessments are
designed to focus the Executives on non‑financial performance, in particular leadership and strategy.
Participants
CEO, Group Executives and CEO ASB
Opportunity
Maximum opportunity of 70% of fixed remuneration (FR). The minimum potential outcome is zero.
Restriction
period
CEO: Subject to a four and five‑year restriction period, 50% from 1 July 2023 to 30 June 2027 and
50% to 30 June 2028.
Group Executives and CEO ASB: Subject to a four‑year restriction period from 1 July 2023 to 30 June 2027.
Pre-grant
assessment
The LTAR award value is subject to a pre‑grant assessment with downward adjustments applied
to reflect material issues. The assessment considers future financial factors and individual non‑financial
performance of people & leadership and strategy execution.
Pre-vest
assessment
The LTAR award is subject to a pre‑vest assessment with potential for downward adjustments applied
based on an assessment of non‑financial performance over the restriction period. The assessment
considers leadership and strategy performance and adjustments will be made for significant failures
resulting in adverse material impacts taking into consideration the participants’ actions or response
to any matters identified.
Instrument
The LTAR award is granted as restricted share units (RSUs). Each RSU entitles the participant to receive
one CBA share (or cash equivalent as determined by the Board) subject to the pre‑vest assessment,
malus review and continuous service prior to vesting.
Maximum
face value
allocation
approach
The number of RSUs granted is calculated as follows for the Executives:
FR $
(at time of grant)
x
÷
=
70%
Share price $
(no discount applied)
Number of RSUs
The share price used was the volume weighted average closing price of CBA’s ordinary shares over the
five trading days up to and including 1 July 2023 ($99.19).
Dividends and/
or dividend
equivalents
For every RSU that ultimately vests following the end of the restriction period and pre‑vest assessment,
the Executive will receive a payment equal to dividends paid by CBA over the restriction period/s in relation
to the vested RSUs. Participants will not receive any franking credits or value in lieu of franking credits.
Board
discretion
The Board has discretion to determine that some or all of unvested awards will lapse in certain
circumstances (malus) or apply clawback (repayments) to vested LTAR awards, including where, in the
opinion of the Board:
• Vesting is not justified or supportable, having regard to the Executive’s performance and/or conduct,
the performance of the business unit or function (as relevant having regard to the participant’s
accountability or role), or overall Group performance.
• There is a significant failure of financial or non‑financial risk management, breach of accountability,
fitness and propriety or compliance obligations.
• Vesting will impact on the financial soundness of the Group or a member of the Group.
• The Group is required or entitled to reclaim remuneration or reduce an Executive’s remuneration
outcome under law, regulation or Group policy.
• A significant unexpected or unintended consequence or outcome has occurred which impacts the
Group, including where original expected performance outcomes have not been realised.
118
Remuneration report (continued)
LTAR – performance assessments
The following diagram illustrates the LTAR pre‑grant and pre‑vest assessments process to support robust decision making
when granting and vesting LTAR awards to Executives.
Forward-looking financial considerations
Determine if any adjustment required as a result of material
forward-looking financial considerations.
• Non‑formulaic trigger to Board discretion
• Likely to impact all participants
Elements for consideration
Key financial metrics are used to determine the forward‑looking
financial assessment for the LTAR award, and may include,
but are not limited to, share price, dividend forecast, capital and
other shareholder measures as set out in the CEO scorecard
(refer to page 115).
Assessment outcomes
Impact
If no material issues identified
No adjustment
If potential material issues
identified
Consider whether LTAR
grant should be adjusted
downwards
Threshold level individual non-financial performance
Determine if adjustment required as a result of individual
contribution to non-financial performance outcomes
relating to strategy and leadership.
• Formulaic trigger to consider if Board discretion is warranted
• Review on an individual level
Elements for consideration
• Leadership performance outcome for prior year’s STVR scorecard
• Strategy Execution performance outcomes for prior year’s
STVR scorecard
• Thresholds set based on historical analysis, triggering
discretionary overlay where outcomes are poor
Board discretion to adjust grant value downwards based on Steps 1 and 2
Board to undertake assessment and apply judgement
based on Steps 1 and 2.
• Non‑formulaic Board determination
• May apply to select or all participants
Elements for consideration
Non‑exhaustive list of issues for Board consideration
and application of discretion may include:
• Broader assessment of non‑financial performance
not captured by STVR scorecard triggers
• Relevant context for prior year performance
• Historical and potential future performance
• Whether performance outcome is already
appropriately impacting other elements
of remuneration (e.g. STVR and LTVR)
Pre-vest assessment
Determine if any adjustments required based on a look-back
review over the LTAR restricted period.
• Non‑formulaic Board determination
• Review on an individual level
Elements for consideration
• Significant failures and resultant material adverse impacts
in people & leadership
• Relevant context including the Board‑endorsed strategy
and leadership expectations
• Executive actions and/or response to any matters identified in
Step 4, with consideration of external/internal operating context
• Adequate reflection of matters across the remuneration
framework (e.g. STVR, LTAR pre‑grant, deferred awards)
over the relevant period
Inputs to support Board discretionary assessment
• Pre‑grant LTAR assessments over the relevant period
• Board strategy reviews
• Indicators of People & Leadership
• Any other inputs as relevant
STVR scorecard outcomes
for Leadership or Strategy
(non-financial)
Impact
Outcome >70% of Target
No adjustment
Outcome between
50% and 70% of Target
Consider whether LTAR
grant should be adjusted
downwards by up to 20%
Outcome <50% of Target
(i.e. Below Threshold)
Consider whether LTAR
grant should be made
Step 1
Step 2
Step 3
Step 4
Step 1
Step 2
Step 3
Step 4
Step 1
Step 2
Step 3
Step 4
Step 1
Step 2
Step 3
Step 4
119
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Long-term variable remuneration (LTVR)
The table below outlines key features of the 2024 financial year LTVR for the Executives. Refer to page 127 for treatment
of LTVR on cessation of employment.
Features
Approach
Purpose
Varies remuneration outcomes in line with longer‑term performance achievement, with
a focus on relative shareholder returns to support sustainable shareholder value over time.
Participants
CEO, Group Executives and CEO ASB
Opportunity
The maximum face value of LTVR that can be granted for the Executives is 70% of fixed
remuneration (FR). The minimum potential outcome is zero.
Performance period
Subject to relative Total Shareholder Return (TSR) performance over four years from 1 July 2023
to 30 June 2027.
Holding period
• CEO: performance rights that vest after performance testing (vested performance rights)
will be exercised into ordinary CBA shares, which remain subject to a further two‑year
holding period (to 30 June 2029).
• Group Executives: vested performance rights will be exercised into ordinary CBA shares,
which remain subject to a further one‑year holding period (to 30 June 2028).
• CEO ASB: performance rights remain subject to a further one‑year holding period
(to 30 June 2028).
Performance measures
and weightings
• 50% measured against a general ASX peer group.
• 50% measured against a financial services peer group.
Instrument
Performance rights – each right entitles the participant to receive one CBA share, subject
to vesting conditions.
Maximum face value
allocation approach
The number of performance rights granted to Executives is calculated as follows:
FR $
(at time of grant)
x
÷
=
70%
Share price $
(no discount applied)
Number of
performance rights
The share price used was the volume weighted average closing price of CBA’s ordinary shares
over the five trading days up to and including 1 July 2023 ($99.19).
Dividends and/or
dividend equivalents
Performance rights do not receive dividends (or dividend equivalent payments) in relation
to the performance period.
CEO and Group Executives: Restricted Shares subject to the holding period have rights
to dividends paid during the holding period.
CEO ASB: For every Performance Right retained during the Holding Period (following
performance testing), the CEO ASB will be entitled to receive a payment equal to dividends
paid by CBA (not including the value of franking credits).
Board discretion
The Board has discretion to determine that some or all of the unvested awards will lapse
in certain circumstances (malus) or apply clawback (repayments) to vested LTVR awards,
including where, in the opinion of the Board:
• Vesting is not justified or supportable, having regard to the Executive’s performance and/or
conduct, the performance of the business unit or function (as relevant having regard to the
participant’s accountability or role), or overall Group performance.
• A significant failure of financial or non‑financial risk management, breach of accountability,
fitness and propriety or compliance obligations.
• Vesting will impact on the financial soundness of the Group or a member of the Group.
• The Group is required or entitled to reclaim remuneration or reduce an Executive’s
remuneration outcome under law, regulation or Group policy.
• A significant unexpected or unintended consequence or outcome has occurred which impacts
the Group, including where original expected performance outcomes have not been realised.
120
Remuneration report (continued)
Performance measures
Approach
Relative TSR
• Relative TSR
provides a robust and
easily quantifiable
performance measure
with strong alignment
to shareholder value.
• TSR measures share price
movement, dividends paid
and any return of capital
over a specific period.
• Relative TSR compares
the ranking of CBA’s TSR
over the performance
period with the TSR
of other companies
in a peer group.
Performance measure framework
Under the LTVR, performance rights are tested at year four and are subject to a further
holding restriction. For the CEO and Group Executives, the performance rights will vest and
be exercised to ordinary CBA shares subject to the holding period. For the CEO ASB, the
performance rights will vest after the holding period has expired subject to vesting conditions.
Peer group ranking
Percentage of award subject to holding period
At the 75th percentile or higher
100%
Between the median and 75th percentile
Pro‑rata from 50% to 100%
At the median
50%
Below the median
0%
Calculation of results
Each company in the peer group will be given a percentile ranking based on the
growth in its TSR over the four‑year performance period. TSR outcomes are calculated
by an external provider.
TSR relative to a general ASX peer group
• The peer group is made up of the 20 largest companies on the ASX by market
capitalisation at the beginning of the performance period, excluding resources companies
and CBA. This cross‑industry peer group has been chosen as it represents the typical
portfolio of companies in which CBA’s shareholders invest, and so provides relevant
benchmarks for measuring CBA’s TSR.
• The peer group at the beginning of the performance period for the relative TSR
performance measure comprised (in alphabetic order):
– ANZ Group Holdings Limited
– Aristocrat Leisure Limited
– Brambles Limited
– Coles Group Limited
– CSL Limited
– Goodman Group
– James Hardie Industries PLC
– Macquarie Group Limited
– National Australia Bank Limited
– QBE Insurance Group Limited
– REA Group Ltd
– Sonic Healthcare Limited
– Suncorp Group Limited
– Telstra Group Limited
– Transurban Group
– Wesfarmers Limited
– Westpac Banking Corporation
– WiseTech Global Limited
– Woolworths Group Limited
– Xero Limited
A reserve bench company will be substituted (in order of market capitalisation as at the
beginning of the performance period) into the peer group when a peer group company
ceases to be listed on the ASX as a result of an acquisition, merger or other relevant
corporate action or delisting. The reserve bench (in order of market capitalisation)
comprised: Cochlear Limited, Origin Energy Limited, Computershare Limited, Insurance
Australia Group Limited and ResMed Inc.
TSR relative to a financial services peer group
• The peer group is made up of the eight most comparable financial services companies
listed on the ASX at the beginning of the performance period.
• The financial services peer group at the beginning of the performance period for the
relative TSR performance measure comprised:
– AMP Limited
– ANZ Group Holdings Limited
– Bank of Queensland Limited
– Bendigo and Adelaide Bank Limited
– Macquarie Group Limited
– National Australia Bank Limited
– Suncorp Group Limited
– Westpac Banking Corporation
There is no reserve bench for this peer group.
The companies comprising each peer group are subject to change at the Board’s discretion.
121
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
3.
Executive KMP statutory remuneration
Executive statutory remuneration accounting expense
The following statutory table details the statutory accounting expense of all remuneration‑related items for Executive
KMP. This includes remuneration costs in relation to both the 2023 and 2024 financial years. The table is different from
the remuneration outcomes table on page 114, which shows the remuneration received in the 2024 financial year rather
than the accrual accounting amounts determined in accordance with the Australian Accounting Standards. The table has
been prepared and audited against the relevant Australian Accounting Standards. Refer to the footnotes below the table
for more detail on each remuneration component.
Short-term benefits
Base
remuneration 1, 2
Non-monetary 3
Cash STVR
(at risk) 4
Deferred STVR
(at risk) 5
Other 6, 9
$
$
$
$
$
CEO
Matt Comyn
30 Jun 24
2,472,601
74,604
920,860
–
(29,421)
30 Jun 23
2,474,708
70,526
1,102,500
–
9,031
Current Group Executives and CEO ASB
Alan Docherty
30 Jun 24
1,122,601
17,842
432,264
–
(55,844)
30 Jun 23
1,124,708
16,654
483,000
–
8,599
Andrew Hinchliff
30 Jun 24
1,172,601
18,716
467,280
–
8,918
30 Jun 23
1,174,708
18,431
496,350
–
(16,208)
Sian Lewis
30 Jun 24
922,601
15,690
349,072
–
(13,716)
30 Jun 23
924,708
14,277
384,750
–
(7,134)
Gavin Munroe 7
30 Jun 24
1,200,000
6,931
462,308
–
700,447
30 Jun 23
752,876
1,684
307,739
–
660,474
Vittoria Shortt 8
30 Jun 24
1,036,233
11,084
416,255
–
89,980
30 Jun 23
1,025,086
10,697
419,696
–
28,010
Angus Sullivan
30 Jun 24
1,272,601
6,931
509,218
–
(54,336)
30 Jun 23
1,274,708
6,691
542,100
–
(90,641)
Mike Vacy-Lyle
30 Jun 24
1,197,601
17,842
455,425
–
(6,840)
30 Jun 23
1,199,708
16,654
574,219
–
(26,605)
Nigel Williams
30 Jun 24
1,422,601
18,716
521,402
–
(27,183)
30 Jun 23
1,424,708
18,431
570,938
–
(30,131)
Former Group Executive
David Cohen 9, 10
30 Jun 24
614,641
8,820
290,521
193,681
550,402
30 Jun 23
1,224,708
16,654
430,313
–
(9,672)
1
Base remuneration together with superannuation (post‑employment benefit), or KiwiSaver for the CEO ASB, comprises fixed remuneration.
2
Total cost of salary, including cash salary, short‑term compensated absences (including other leave benefits) and any salary sacrificed benefits for the period in the
KMP role.
3
Cost of car parking (including associated fringe benefits tax). For Matt Comyn, this also includes costs in relation to a motor vehicle benefit.
4
KiwiSaver is payable on the CEO ASB’s cash STVR.
5
The deferred portion of David Cohen's 2024 STVR was deferred into cash in line with the Financial Accountability Regime (FAR) requirements.
6
Includes company‑funded benefits (including associated fringe benefits tax where applicable) and the net change in accrued annual leave. For Gavin Munroe
this also includes costs relating to a housing allowance and the FY24 expense for his one‑off award provided in compensation for awards foregone from his
previous employer.
7
Gavin Munroe commenced as a KMP on 14 November 2022, FY23 remuneration reflects time in role. Gavin has elected to receive cash in lieu of employer
superannuation contributions as the criteria have been met per the terms of his visa.
8
For Vittoria Shortt, remuneration was paid in New Zealand dollars. The values shown are impacted by movements in exchange rates.
9
David Cohen ceased as KMP on 31 December 2023 and remuneration reflects time he was a KMP. Value under 'Other' for David includes a payment of
$611,301 for FY24 relating to his termination benefit in line with grandfathered contractual severance conditions and none for the prior financial year.
10 The equity values for David Cohen reflect the acceleration of the unvested awards he retained at cessation of employment, relating to the FY22 STVR
(tranche 2), FY23 STVR (tranches 1 and 2), FY22, FY23 and FY24 LTAR and FY21 (tranches 1 and 2), FY22 (tranches 1 and 2), FY23 and FY24 LTVR awards.
These amounts would have otherwise been included in future year disclosures and relate to awards that will be assessed in the ordinary course at the end of the
respective vesting periods and may not vest.
122
Remuneration report (continued)
Post-employment
benefits
Long-term benefits
Share-based payments
Superannuation 11
Long-term 12
Deferred equity
(at risk) 13
LTAR equity
(at risk)
LTVR equity
(at risk) 14, 15
Total statutory
remuneration 16
$
$
$
$
$
$
27,399
65,095
1,011,765
1,631,088
994,499
7,168,490
25,292
72,192
1,042,000
1,225,609
1,320,015
7,341,873
27,399
38,253
458,842
834,969
458,125
3,334,451
25,292
29,886
464,801
627,732
611,202
3,391,874
27,399
58,866
474,762
848,394
465,526
3,542,462
25,292
52,103
465,288
632,142
619,741
3,467,847
27,399
48,828
367,412
690,759
379,000
2,787,045
25,292
36,959
372,977
519,556
505,922
2,777,307
–
8,751
466,464
379,710
266,072
3,490,683
–
3,633
415,344
149,837
140,058
2,431,645
43,575
39,416
440,374
776,451
549,213
3,402,581
43,343
38,101
540,269
586,172
596,076
3,287,450
27,399
45,140
522,635
962,090
527,269
3,818,947
25,292
27,942
530,182
727,809
684,812
3,728,895
27,399
20,147
511,652
891,458
489,205
3,603,889
25,292
13,741
520,007
670,686
747,434
3,741,136
27,399
33,203
545,207
1,073,117
588,100
4,202,562
25,292
23,440
553,852
811,817
759,642
4,157,989
13,774
15,504
423,059
1,862,150
1,035,358
5,007,910
25,292
31,740
468,851
699,836
695,477
3,583,199
11 Superannuation contributions for Vittoria Shortt are made in line with the KiwiSaver employer contribution requirements (this includes the additional payment
of $12,488 payable on her cash STVR component).
12 Long service leave entitlements accrued during the year as well as the impact of changes to long service leave valuation assumptions, which are determined
in line with Australian Accounting Standards.
13 The value of deferred equity awards is allocated from the start of the performance period to vesting date. Deferred 2024 financial year STVR is expensed over
the vesting period commencing 1 July 2023. For Gavin Munroe this also includes the expense for Gavin's one‑off equity awards.
14 2024 financial year expense for the 2021, 2022, 2023 and 2024 financial year LTVR awards.
15 The value of LTVR awards is allocated over each year in the performance period.
16 The percentage of 2024 financial year remuneration related to performance was: Matt Comyn 64%, Alan Docherty 66%, Andrew Hinchliff 64%, Sian Lewis
64%, Gavin Munroe 45%, Vittoria Shortt 64%, Angus Sullivan 66%, Mike Vacy‑Lyle 65%, Nigel Williams 65% and David Cohen 76%.
123
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Movement in Executive shares and other securities during the 2024 financial year
The table below details the value and number of all equity awards that were granted or vested to or forfeited by Executives
during their time in a KMP role in the 2024 financial year. It also shows the number of previous years’ awards that were vested,
forfeited or lapsed, and the movement in ordinary shareholdings for each individual during the 2024 financial year.
Balance
1 Jul 23
Acquired/granted
as remuneration
during the 2024
financial year 2
Awards vested during
2024 financial year 3
Net change
other 4
Balance
30 Jun 24 5
Equity Class 1
Units
Units
$
Units
$
Units
Units
CEO
Matt Comyn
Ordinary
95,844
–
–
54,279
–
(54,643)
95,480
Deferred STVR shares
15,163
10,894 1,102,582
9,918
1,003,702
–
16,139
LTAR restricted share units
60,012
17,642 1,802,130
–
–
–
77,654
LTVR performance rights
107,969
17,642
944,023
44,361
4,552,326
(3,596)
77,654
Current Group Executives and CEO ASB
Alan Docherty 6
Ordinary
34,637
–
–
25,161
–
(23,910)
35,888
Deferred STVR shares
6,899
4,773
483,075
4,492
454,590
–
7,180
LTAR restricted share units
27,676
8,115
828,947
–
–
–
35,791
LTVR performance rights
50,020
8,114
434,180
20,669
2,121,053
(1,675)
35,790
Andrew Hinchliff Ordinary
24,520
–
–
25,687
–
(25,687)
24,520
Deferred STVR shares
6,830
4,905
496,435
4,514
456,817
–
7,221
LTAR restricted share units
27,889
8,468
865,006
–
–
–
36,357
LTVR performance rights
50,777
8,468
453,123
21,173
2,172,773
(1,716)
36,356
Sian Lewis
Ordinary
3,640
–
–
20,795
–
(17,687)
6,748
Deferred STVR shares
5,562
3,802
384,800
3,655
369,886
–
5,709
LTAR restricted share units
22,916
6,704
684,814
–
–
–
29,620
LTVR performance rights
41,443
6,704
358,731
17,140
1,758,907
(1,389)
29,618
Gavin Munroe
Ordinary
1,219
–
–
690
–
(345)
1,564
Deferred STVR shares
n/a
3,041
307,780
–
–
–
3,041
LTAR restricted share units
5,731
8,468
865,006
–
–
–
14,199
LTVR performance rights
9,134
8,468
453,123
–
–
–
17,602
Deferred one‑off shares
3,451
–
–
690
81,938
–
2,761
Vittoria Shortt
Ordinary
45,094
–
–
31,629
–
(28,500)
48,223
Deferred STVR shares
14,458
4,147
419,718
12,240 1,238,688
–
6,365
LTAR restricted share units
25,888
7,451
761,120
–
–
–
33,339
LTVR performance rights
46,934
7,450
398,650
19,389 1,989,699
(1,659)
33,336
Angus Sullivan
Ordinary
12,242
–
–
27,457
–
(22,180)
17,519
Deferred STVR shares
7,889
5,357
542,182
5,277
534,032
–
7,969
LTAR restricted share units
32,263
9,174
937,124
–
–
–
41,437
LTVR performance rights
56,240
9,174
490,901
22,180
2,276,112
(1,798)
41,436
Mike Vacy‑Lyle
Ordinary
11,914
–
–
27,162
–
–
39,076
Deferred STVR shares
7,564
5,674
574,266
4,982
504,178
–
8,256
LTAR restricted share units
29,589
8,645
883,087
–
–
–
38,234
LTVR performance rights
53,566
8,644
462,540
22,180
2,276,112
(1,798)
38,232
Nigel Williams
Ordinary
40,000
–
–
29,858
–
(59,858)
10,000
Deferred STVR shares
8,272
5,642
571,027
5,494
555,993
–
8,420
LTAR restricted share units
35,987
10,232 1,045,199
–
–
–
46,219
LTVR performance rights
62,325
10,232
547,514
24,364
2,500,234
(1,975)
46,218
Former Group Executive
David Cohen 7
Ordinary
96,007
–
–
29,209
–
(8,282)
n/a
Deferred STVR shares
7,533
4,252
430,345
5,013
507,316
–
n/a
LTAR restricted share units
31,023
4,410
450,482
–
–
–
n/a
LTVR performance rights
57,179
4,410
235,979
24,196 2,482,994
(1,961)
n/a
PERLS
626
–
–
–
–
–
n/a
124
Remuneration report (continued)
1
Ordinary shares include all CBA shares held by the Executive's close family members or entities over which the Executive or their close family member has,
either directly or indirectly control, joint control, or significant influence. Deferred STVR shares represents STVR previously awarded under the executive
arrangements in prior years. LTVR performance rights are subject to performance hurdles. LTAR restricted share units granted from 2023 financial year are
subject to a pre‑vest assessment. The maximum potential value for unvested awards are subject to CBA share price at time of vesting.
2
Represents the maximum number of equity awards that may vest to each Executive in respect of their time as KMP. The values represent the fair value at grant
date. The minimum potential value for the equity awards is zero. Approval was given for the issue of the CEO’s 2024 financial year LTAR and LTVR awards
under ASX Listing Rule 10.14 at the 2023 Annual General Meeting.
3
Awards that vested include the 2020 financial year LTVR award vested at 92.5% (granted 18 November 2019) and 92.1% for the CEO ASB, deferred STVR
awards vested at 100% (tranches granted 1 September 2021 and 1 September 2022 and deferred FY19 STVR for the CEO ASB) and one‑off awards vested
at 100% (granted 14 November 2022) that vested during time in KMP role. The value of the awards vested is calculated using VWACP for the five trading days
preceding the vesting date. Executives received one ordinary share in respect of each LTVR performance right that vested during the financial year.
4
Net change other incorporates changes resulting from purchases (sales) of ordinary shares or forfeitures of the FY20 LTVR performance rights (granted
18 November 2019) during the year.
5
Deferred STVR shares, LTAR restricted share units, LTVR performance rights and deferred one‑off shares are unvested as at 30 June 2024.
6
Opening balance has been revised from 35,270 to 34,637 to include a correction to CBA ordinary shares.
7
Share movements for David Cohen reflect the duration of the year that he was a KMP. Opening balance has been revised from 96,104 to 96,007 to include
a correction to CBA ordinary shares.
Overview of unvested equity awards
All awards are subject to continued employment, Board risk and reputation review, and malus and clawback provisions.
Details of minimum and maximum of the potential values of the awards granted in respect of previous years can be found
in CBA’s previous remuneration reports which are available at commbank.com.au/investors.
Equity plan
Participants
Grant date
Start date 1
End date2
Measures and conditions
FY22 STVR
CEO & GEs
(incl. CEO ASB)
1 Sep 22
1 Jul 21
1 Sep 24
Two tranches vesting equally one and two years
after grant date.
FY23 STVR
1 Sep 23
1 Jul 22
1 Sep 25
FY21 LTVR
CEO
16 Nov 20
1 Jul 20
30 Jun 27
Two tranches with performance measured after
four years being:
• 50% TSR ranking relative to general ASX
peer group
• 50% TSR ranking relative to financial services
peer group
A further holding period of two and three years
is applied for the CEO, and one and two years
for the Group Executives and CEO ASB.
GE
(incl. CEO ASB)
16 Nov 20
1 Jul 20
30 Jun 26
FY22 LTVR
CEO
18 Nov 21
1 Jul 21
30 Jun 28
GE
(incl. CEO ASB)
18 Nov 21
1 Jul 21
30 Jun 27
FY23 LTVR
CEO
16 Nov 22
1 Jul 22
30 Jun 28
Two tranches with performance measured after
four years being:
• 50% TSR ranking relative to general ASX
peer group
• 50% TSR ranking relative to financial services
peer group
A further holding period of two years is applied
for the CEO, and one year for the Group
Executives and CEO ASB.
GE
(incl. CEO ASB)
16 Nov 22
1 Jul 22
30 Jun 27
FY24 LTVR
CEO
15 Nov 23
1 Jul 23
30 Jun 29
GE
(incl. CEO ASB)
15 Nov 23
1 Jul 23
30 Jun 28
FY21 LTAR
CEO
16 Nov 20
1 Jul 20
30 Jun 25
Two tranches for each LTAR award vesting
equally four and five years after start date,
subject to pre‑vest assessment for FY23 and
FY24 awards.
FY22 LTAR
18 Nov 21
1 Jul 21
30 Jun 26
FY23 LTAR
16 Nov 22
1 Jul 22
30 Jun 27
FY24 LTAR
15 Nov 23
1 Jul 23
30 Jun 28
FY22 LTAR
GE
(incl. CEO ASB)
18 Nov 21
1 Jul 21
30 Jun 25
One tranche vesting four years after start date,
subject to pre‑vest assessment for FY23 and
FY24 awards.
FY23 LTAR
16 Nov 22
1 Jul 22
30 Jun 26
FY24 LTAR
15 Nov 23
1 Jul 23
30 Jun 27
One-off
equity
Gavin Munroe
14 Nov 22
n/a
8 Mar 28
Awards for compensation foregone from previous
employer with four tranches remaining with
vesting subject to service.
1
Start date refers to performance start date.
2
End date refers to the end of the restriction or holding period as applicable.
125
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Details for awards granted in the 2024 financial year
In the 2024 financial year, a face value allocation approach was used to determine the number of restricted share units granted
under the LTAR (refer to page 118) and performance rights granted under the LTVR (refer to page 120). The table below
is provided in accordance with statutory requirements. The fair value of LTVR grants has been calculated using a Monte Carlo
simulation method. No amount is payable by Executives on the issue or vesting of the restricted share units and performance
rights of the LTAR or LTVR awards respectively. As these awards are automatically exercised, they do not have an expiry date.
Equity plan
Performance measure
Grant date
Fair value
$
Weighting
Assessment
period
end/final
vesting date
End of holding
period
FY23 STVR
deferred shares
Service
1 Sep 23
101.21
100%
1 Sep 25
n/a
FY24 LTAR
restricted share units
(CEO)
Service and pre‑vest
assessment
15 Nov 23
102.15
50%
30 Jun 27
n/a
50%
30 Jun 28
n/a
FY24 LTAR
restricted share units
(Group Executives and
CEO ASB)
Service and pre‑vest
assessment
15 Nov 23
102.15
100%
30 Jun 27
n/a
FY24 LTVR
performance rights
(CEO)
Relative TSR
(General ASX peer
group)
15 Nov 23
55.98
50%
30 Jun 27
30 Jun 29
Relative TSR (Financial
Services peer group)
51.04
50%
FY24 LTVR
performance rights
(Group Executives and
CEO ASB)
Relative TSR
(General ASX peer
group)
15 Nov 23
55.98
50%
30 Jun 27
30 Jun 28
Relative TSR (Financial
Services peer group)
51.04
50%
Hedging policy
Employees are prohibited from hedging, or otherwise limiting, their economic exposure to equity price risk in relation
to unvested equity‑linked remuneration issued under any Group equity arrangement. CBA Board Directors, the CEO, Group
Executives and their Associates must not hedge their exposure to vested Group Securities. Breaches of this requirement may
result in disciplinary action, including the forfeiture and/or lapsing of unvested awards. Further details of hedging restrictions
are set out in the Group Securities Trading Policy.
The Group Securities Trading Policy is available at commbank.com.au/corporategovernance
126
Remuneration report (continued)
Executive employment arrangements
The table below provides the employment arrangements for Executives.
Contract term
CEO
Group Executives
CEO ASB
Contract type 1
Permanent
Permanent
Permanent
Notice period
12 months
Six months
Six months
Severance
n/a 2
n/a 2
12 months 2
STVR
treatment
on termination
In general, unless otherwise determined by the Board (or ASB Board in respect of the CEO ASB)
and subject to law:
• In the case of resignation or termination for cause before the end of the restriction period,
any deferred shares will be forfeited and the Executive will not be eligible to be considered for
an STVR award for that year.
• Where an Executive’s exit is related to any other reason (i.e. retrenchment, retirement, ill‑health
separation, mutual agreement or death), the Executive remains eligible (unless the Board
determines otherwise) to be considered for an STVR award with regard to actual performance
against performance measures (as determined by the Board in the ordinary course following the
end of the performance period).
• Where an Executive’s exit is related to any other reason (e.g. retrenchment, retirement, ill‑health
separation, mutual agreement or death), unvested deferred STVR shares will remain on‑foot and
will vest in the ordinary course, subject to the terms and conditions of the award other than those
relating to continuity of employment.
LTAR
treatment
on termination
In general, unless otherwise determined by the Board and subject to law:
• In the case of resignation or termination for cause before the end of the restriction period,
any restricted share units will lapse.
• Where an Executive’s exit is related to any other reason (i.e. retrenchment, retirement, ill‑health
separation, mutual agreement or death), the restricted share units will remain on‑foot and will vest
in the ordinary course subject to the terms and conditions (other than those relating to continuity
of employment).
LTVR
treatment
on termination
In general, unless otherwise determined by the Board:
• In the case of resignation or termination for cause, any performance rights will lapse.
• Where an Executive’s exit is related to any other reason (i.e. retrenchment, retirement, ill‑health
separation, mutual agreement or death), any unvested LTVR awards continue on‑foot with
performance measured at the end of the performance period related to each award (and with
the award otherwise remaining subject to all terms and conditions other than those relating
to continuity of employment).
Executives who are terminated for cause during the holding period will forfeit all performance rights
or ordinary CBA shares (as applicable) subject to the holding period. Where an Executive ceases for
any other reason during the holding period, outstanding ordinary CBA shares or performance rights
(as applicable) will continue to remain on‑foot for the original holding period(s).
1
Contracts for permanent employment continue until notice is given by either party.
2
Contractual severance pay is not offered in the CEO and Group Executive employment arrangements. The CEO and Group Executives (excluding CEO ASB)
remain entitled to statutory redundancy pay if retrenched. For the CEO ASB, contractual arrangements would apply, allowing for minimum 12 months’ base salary
(inclusive of notice) or a maximum of 64 weeks in accordance with ASB Policy.
127
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
4.
Risk and remuneration adjustments
CBA’s risk assessment processes and remuneration framework are designed to promote accountability for taking risks we can
understand and manage, to be adaptive to the changing landscape of threats and opportunities and to support taking the right
risks, with a strong emphasis on customer outcomes, resilience, security and safety.
The remuneration adjustments made in the 2023, 2022 and 2021 financial years provided below include senior leaders
(the Executive Leadership Team, Executive General Managers and General Managers) and all other employees eligible for
a performance review. The figures below have been reported to the Board in October for the respective financial year.
2023 financial year
2022 financial year
2021 financial year
Employees rated ‘exceptionally managed’ for risk 1
542 employees
588 employees
463 employees
Positive risk-related adjustments to senior
leaders’ STVR
20
24
21
Positive risk-related adjustments for all
other employees
521
557
429
Employees rated ‘partially met’ or ‘not met’ for risk 1
1,499 employees
1,918 employees
2,258 employees
Downward risk-related adjustments to senior
leaders’ STVR
9
20
25
Downward risk-related adjustments for all
other employees
1,475
1,893
2,205
1
The figures for both positive and downward risk‑related adjustments above do not total the number of employees rated ‘exceptionally managed’ and ‘partially
met’ or ‘not met’ for risk due to employee movements (including exits) between the time of performance review and finalised STVR outcomes.
CBA recognises and rewards a cohort of employees rated ‘exceptionally managed’ for managing risk in a way that brings our
purpose and values to life. Everyday risk recognition continues to be incorporated in the Group‑wide recognition platform,
providing our people with the ability to recognise positive risk behaviours.
In the 2023 financial year, 95.3% of employees were assessed as fully meeting risk expectations in their roles (93.8% in 2022).
STVR outcomes have been reduced by a minimum of 10% for ‘partially met’ ratings since the 2019 financial year and ranged
up to 100% reduction for ‘not met’ risk ratings.
During the 2024 financial year, CBA’s consequence management processes identified 2,259 instances of substantiated
misconduct, with 180 resulting in termination. A review of the consequence management framework was also completed
to identify opportunities for enhancement and ensure the framework remains robust and aligned to CBA’s risk culture.
Risk assessment in performance and remuneration
CBA’s performance and remuneration frameworks support and promote taking risks we can understand and manage holding
employees individually and collectively accountable for managing role‑related risks and compliance with the Group’s Code
of Conduct, including policies such as Group Mandatory Learning.
Group-wide risk assessment guidance including examples is continually enhanced to set clear expectations of managing risks
for both employees and managers, and to help people leaders consistently assess risk behaviours and outcomes, determine
the appropriate level of STVR adjustments for not fully meeting expectations, and document the reasons for their assessment.
Executive Leadership Team risk assessments continue to be supported by Executive Risk Scorecards, independent
assessment by the Chief Risk Officer, and the Committees meet concurrently as part of the interim and annual performance
assessment processes.
Comprehensive reporting is provided to the Board to support its oversight of risk assessment and remuneration outcomes
and to inform the Board’s guidance for the annual performance and remuneration review.
Malus and clawback
• Malus (the ability to lapse/forfeit or reduce vesting of deferred variable remuneration) and clawback (the repayment
of variable remuneration that has been paid or vested) are embedded within our consequence management framework.
• Malus is applied to unvested deferred variable remuneration in relation to poor risk outcomes and/or misconduct. No malus
was applied during the 2023 financial year.
• To the extent in‑year adjustments or malus are insufficient to satisfy remuneration consequences determined by the Board,
clawback may be applied to the variable remuneration awarded to the CEO, GEs, and other regulated roles of the Group
in line with prudential requirements.
• The time horizon of application has also been aligned to the APRA Prudential Standard CPS 511, i.e. in general, the Board
may exercise clawback in relation to applicable roles for at least two years from the date of payment or vesting, including
where the employment or engagement of the person has ceased.
128
Remuneration report (continued)
5.
Non-Executive Director arrangements
The table below outlines the Non‑Executive Directors for the financial year ended 30 June 2024. Non‑Executive Directors
are required to hold CBA shares equivalent to 100% of Board Chair fees for the Chair and 100% of Board member fees
for Non‑Executive Directors. This is to be accumulated within five years commencing the later of 1 July 2019 or date
of appointment, valued with reference to the prevailing CBA share price at the relevant accumulation commencement date.
This is also the starting date for compliance with the revised MSR within five years. Progress against the MSR for each
individual is shown in the table below.
Name
Position
Term as KMP
Current shareholding 1
Progress against
MSR and deadline
Chair
Paul O’Malley
Chair
Full year
87%
On track, 10 August 2027
Current Non-Executive Directors
Lyn Cobley
Director
Full year
122%
Meets
Julie Galbo
Director
Full year
61%
On track, 1 September 2026
Peter Harmer
Director
Full year
100%
Meets
Simon Moutter
Director
Full year
115%
Meets
Mary Padbury
Director
Full year
166%
Meets
Anne Templeman‑Jones
Director
Full year
102%
Meets
Rob Whitfield AM
Director
Full year
128%
Meets
Former Non-Executive Director
Genevieve Bell AO 2
Director
Part year
n/a
n/a
1
The percentage shown represents the individual’s percentage of CBA shares as a proportion of their individual base fees.
2
Genevieve Bell AO retired as Non‑Executive Director on 31 October 2023.
Non-Executive Director fees
Non‑Executive Directors receive fees as compensation for their work on the Board and the associated Committees
on which they serve. Non‑Executive Directors do not receive any performance‑related remuneration. The total amount
of Non‑Executive Directors’ fees is capped at a maximum fee pool that is approved by shareholders. The current fee pool
is $4.75 million, which was approved by shareholders at CBA’s 2015 Annual General Meeting on 17 November 2015.
Fees are reviewed and recommended to the Board at least every two years. The fees were reviewed in the 2024 financial
year and as a result, Board member fees increased to $260,000 (from $242,000) from 1 January 2024 to maintain relative
competitive alignment with peers. Fees are inclusive of base fees and statutory superannuation. The Chair does not receive
separate Committee fees.
The following table outlines the Non‑Executive Directors’ fees for the Board and the Committees for the periods 1 July 2023
to 31 December 2023 and 1 January 2024 to 30 June 2024.
Fees effective 1 July 2023
Fees effective 1 January 2024
Board/Committee
Chair
$
Member
$
Chair
$
Member
$
Board
890,000
242,000
890,000
260,000
Audit Committee
70,000
35,000
70,000
35,000
Risk & Compliance Committee
70,000
35,000
70,000
35,000
People & Remuneration Committee
70,000
35,000
70,000
35,000
Nominations Committee 1
–
12,500
–
12,500
United Kingdom Remuneration Assurance Committee (UK RAC) 2
30,000
18,000
30,000
18,000
1
The Chair of the Board is also the Chair of the Nominations Committee; no additional fee is paid for this.
2
Board members who also serve as members of the UK RAC receive fees in relation to this service, and these fees are set appropriately below fees for UK RAC
independent members given a small portion of UK RAC matters overlap with People & Remuneration Committee matters.
129
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Non-Executive Director statutory remuneration
The statutory table below details individual statutory remuneration for the Non‑Executive Directors for both the 2023
and 2024 financial years. The table has been prepared and audited against the relevant Australian Accounting Standards.
Refer to the footnotes below the table for more detail on each remuneration component.
Short-term
benefits
Post-employment
benefits
Share-based
payments
Cash 1
Superannuation 2
Non-Executive
Directors’
Share Plan 3
Total statutory
remuneration
$
$
$
$
Chair
Paul O’Malley
30 Jun 24
883,055
27,399
–
910,454
30 Jun 23
823,826
25,292
–
849,118
Current Non-Executive Directors
Lyn Cobley
30 Jun 24
276,393
26,068
–
302,461
30 Jun 23
163,800
17,203
–
181,003
Julie Galbo
30 Jun 24
312,088
27,399
4,190
343,677
30 Jun 23
279,231
24,788
48,023
352,042
Peter Harmer
30 Jun 24
301,025
27,399
–
328,424
30 Jun 23
286,931
25,292
–
312,224
Simon Moutter 4
30 Jun 24
345,507
27,399
–
372,906
30 Jun 23
330,518
25,292
–
355,810
Mary Padbury
30 Jun 24
230,101
27,152
40,360
297,613
30 Jun 23
224,829
25,292
39,586
289,707
Anne Templeman-Jones
30 Jun 24
300,719
27,399
26,838
354,956
30 Jun 23
295,916
25,292
26,440
347,648
Rob Whitfield AM
30 Jun 24
288,398
27,399
51,716
367,513
30 Jun 23
283,441
25,292
51,024
359,757
Former Non-Executive Director
Genevieve Bell AO 5
30 Jun 24
85,471
9,574
3,001
98,046
30 Jun 23
222,676
25,292
41,739
289,707
1
Cash includes Board and Committee fees received as cash, as well as the provision of additional benefits (including associated fringe benefits tax).
2
Superannuation contributions are capped at the superannuation maximum contributions base as prescribed under the Superannuation Guarantee legislation.
3
The values shown in the table represent the post‑tax portion of fees received as shares under the Non‑Executive Directors' Share Plan (NEDSP). The NEDSP
facilitates the pre‑tax (to a maximum of $5,000 p.a.) and/or post‑tax application of fees to the acquisition of shares. Shares under the NEDSP are granted
on current share price at grant date.
4
Simon Moutter has provided consulting services to the ASB Banking Limited Technology Advisory Group (ASB TAG) during the year. He received payment
(NZ$50,000 per annum) for these additional services; however, these amounts have not been included in the table above as they were not related to his role
and have no bearing on his remuneration as a Director of the Commonwealth Bank of Australia.
5
Genevieve Bell AO retired as Non‑Executive Director on 31 October 2023.
130
Remuneration report (continued)
Shares and other securities held by Non-Executive Directors
Details of the shareholdings and other securities as well as interests in registered schemes made available by CBA, or a related
body corporate of CBA held by Non‑Executive Directors (or close family members or entities controlled, jointly controlled,
or significantly influenced by them, or any entity over which any of the aforementioned hold significant voting power) are set
out below relating to time in KMP role. All shares were acquired by Non‑Executive Directors on normal terms and conditions
or through the Non‑Executive Directors’ Share Plan (NEDSP). Other securities acquired by Non‑Executive Directors were
on normal terms and conditions.
Class
Balance
1 Jul 2023
Acquired 1
Net change
other 2
Balance
30 Jun 2024
Chair
Paul O’Malley
Ordinary
7,630
–
–
7,630
Current Non-Executive Directors
Lyn Cobley
Ordinary
3,040
1,000
(840)
3,200
PERLS 3
2,904
–
(1,100)
1,804
Julie Galbo
Ordinary
1,020
449
–
1,469
Peter Harmer
Ordinary
2,933
–
–
2,933
Simon Moutter
Ordinary
4,000
–
–
4,000
Mary Padbury
Ordinary
4,307
553
–
4,860
Anne Templeman‑Jones
Ordinary
2,506
469
–
2,975
Rob Whitfield AM
Ordinary
3,221
537
–
3,758
Former Non-Executive Director
Genevieve Bell AO 4
Ordinary
2,086
134
–
n/a
PERLS 3
1,020
–
–
n/a
1
Incorporates shares and other securities acquired during the year. In the 2024 financial year, under the NEDSP, Julie Galbo acquired 147 shares, Mary Padbury
acquired 429 shares, Anne Templeman‑Jones acquired 301 shares, Rob Whitfield acquired 537 shares and Genevieve Bell acquired 134 shares. No PERLS were
acquired during the year.
2
Net change other incorporates changes resulting from other transfers of securities.
3
Includes cumulative holdings of PERLS securities issued by the Group.
4
Genevieve Bell AO retired as Non‑Executive Director on 31 October 2023.
131
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Non-audit services
Amounts paid or payable to PricewaterhouseCoopers (PwC) for audit, review, assurance and non-audit services provided
during the year, are set out in Note 12.3 to the Financial report on page 284.
Auditor’s Independence Declaration
We have obtained an independence declaration from our external auditor as presented on page 134.
Auditor independence
The operation of the Group External Auditor Services Policy assists in ensuring the independence of the Group’s external auditor.
The Audit Committee has considered the provision, during the year, of non-audit services by PwC, and has concluded that the
provision of those services did not compromise the auditor independence requirements of the Corporations Act 2001 (Cth).
The Audit Committee is satisfied that the provision of the non-audit services by PwC during the year is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001 (Cth).
The Directors have considered the provision of non-audit services by PwC for the year ended 30 June 2024 and are satisfied
that, in accordance with the advice received from the Board Audit Committee, such services are compatible with the general
standard of independence for auditors and did not compromise the auditor independence requirements of the Corporations
Act 2001 (Cth). The reasons for this are as follows:
• the effective operation of the Group External Auditor Services Policy during the year to restrict the nature of non-audit
services engagements, to prohibit certain services and to require Board Audit Committee pre-approval for all such
engagements; and
• the relative quantum of fees paid for non-audit services compared to the quantum for audit and audit-related services
was appropriate.
The above Directors’ statements are in accordance with the advice received from the Audit Committee.
Incorporation of additional material
The following sections form part of this report and should be read in conjunction:
• the Our approach to corporate governance section on pages 80–97;
• information on Directors’ shareholdings, share rights and options on pages 124 and 131;
• the Remuneration report can be found on pages 104–132;
• dividend information can be found in Note 8.4 to the Financial report on pages 221–222;
• non-audit services information can be found in Note 12.3 to the Financial report on page 284; and
• the external auditor’s independence declaration on page 134.
This Directors’ report is made in accordance with a resolution of the Directors.
Paul O’Malley
Chairman
Matt Comyn
Managing Director and Chief Executive Officer
14 August 2024
133
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Directors’ report (continued)
6.
Loans and other transactions
Loans to KMP
All loans to KMP (including close family members or entities controlled, jointly controlled, or significantly influenced by them,
or any entities over which any of those family members or entities held significant voting power) have been made in the
ordinary course of business on normal commercial terms and conditions no more favourable than those given to other
employees, including the term of the loan, security required and the interest rate (which may be fixed or variable). No loans
were written down during the period.
Total loans to KMP
$
Opening balance (1 July 2023) 1
16,611,831
Closing balance (30 June 2024) 2
17,357,264
Interest charged (during 2024 financial year)
473,103
1
Opening balance at 1 July 2023 has been revised due to transactions being adjusted during the reporting period and correction to a loan amount.
2
The aggregate loan amount at the end of the reporting period includes loans issued to 15 KMP and their related parties.
Loans to KMP exceeding $100,000 in aggregate during the 2024 financial year
Balance
1 Jul 2023 1
Interest
charged
Interest not
charged
Write-off
Balance
30 Jun 2024
Highest
balance
in period 2
$
$
$
$
$
$
Alan Docherty
2,567,204
129,997
–
–
4,420,206
4,945,211
Andrew Hinchliff
4,261,150
83,021
–
–
4,005,838
4,285,311
Angus Sullivan
3,834,762
44,489
–
–
4,275,011
4,884,072
Mike Vacy‑Lyle
3,861,216
149,576
–
–
2,793,291
4,058,432
Vittoria Shortt
1,918,120
62,265
–
–
1,695,567
2,107,290
Total
16,442,453
469,348
–
–
17,189,912
20,280,316
1
Opening balances at 1 July 2023 have been revised due to transactions being adjusted during the reporting period and correction to a loan amount.
2
Represents the sum of highest balances outstanding at any point during the 2024 financial year for each individual loan held by the KMP and their related parties.
Other transactions of KMP
Financial instrument transactions
Financial instrument transactions (other than loans and shares disclosed within this report) with KMP, their close family
members and entities controlled or significantly influenced by them, occur in the ordinary course of business on normal
commercial terms and conditions no more favourable than those given to other employees.
All such financial instrument transactions that have occurred between entities within the Group and KMP, their close family
members and entities controlled or significantly influenced by them, were in the nature of normal personal banking and
deposit transactions.
Transactions other than financial instrument transactions
All other transactions with KMP, their close family members, related entities and other related parties are conducted
in the ordinary course of business on normal commercial terms and conditions no more favourable than those given to other
employees and customers. These transactions principally involve the provision of financial and investment services by entities
not controlled by the Group.
Dividend Equivalent Payment Accrual
Liability owing on dividend equivalent payments for the FY21, FY22, FY23 and FY24 long‑term variable remuneration (LTAR)
awards accumulated over the restriction period was $4,066,510 as at 30 June 2024. Details of the LTAR can be found
on page 118.
132
Remuneration report (continued)
Financial report contents
Financial statements
Income Statements
136
Statements of Comprehensive Income
137
Balance Sheets
138
Statements of Changes in Equity
139
Statements of Cash Flows
141
Notes to the financial statements
1.
Overview
143
1.1
General information, basis of accounting,
changes in accounting policies and future
accounting developments
143
2.
Our performance
146
2.1
Net interest income
146
2.2
Average balances and related interest
148
2.3
Net other operating income
154
2.4
Operating expenses
156
2.5
Income tax expense
158
2.6
Earnings per share
161
2.7
Financial reporting by segments
162
3.
Our lending activities
167
3.1
Loans and other receivables
167
3.2
Loan impairment expense and provisions
for impairment
171
4.
Our deposits and funding activities
178
4.1
Deposits and other public borrowings
178
4.2
Liabilities at fair value through Income
Statement
179
4.3
Debt issues
180
4.4
Term funding from central banks
182
4.5
Securitisation, covered bonds and
transferred assets
183
5.
Our investing, trading and other
banking activities
185
5.1
Cash and liquid assets
185
5.2
Receivables from and payables to financial
institutions
185
5.3
Assets at fair value through Income Statement
186
5.4
Derivative financial instruments and hedge
accounting
187
5.5
Investment securities
197
6.
Other assets
199
6.1
Property, plant and equipment
199
6.2
Intangible assets
202
6.3
Other assets
205
7.
Other liabilities
206
7.1
Provisions
206
7.2
Bills payable and other liabilities
213
8.
Our capital, equity and reserves
214
8.1
Capital adequacy
214
8.2
Loan capital
215
8.3
Shareholders’ equity
217
8.4
Dividends
221
9.
Risk management
223
9.1
Risk management framework
224
9.2
Credit risk
231
9.3
Market risk
247
9.4
Liquidity and funding risk
250
9.5
Disclosures about fair values
255
9.6
Collateral arrangements
260
9.7
Offsetting financial assets and
financial liabilities
261
10.
Employee benefits
265
10.1
Share-based payments
265
10.2
Retirement benefit obligations
268
10.3
Key management personnel
271
11.
Group structure
273
11.1
Investments in subsidiaries and other entities
273
11.2
Related party disclosures
278
11.3
Discontinued operations and businesses held
for sale
279
12.
Other
281
12.1
Contingent liabilities, contingent assets
and commitments arising from the
banking business
281
12.2
Notes to the Statements of Cash Flows
283
12.3
Remuneration of auditors
284
12.4
Subsequent events
285
Consolidated Entity Disclosure Statement
286
Directors’ declaration
289
Independent auditor’s report
290
Additional information
298
135
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
As lead auditor for the audit of the Commonwealth Bank of Australia for the year ended 30 June 2024, I declare that to the
best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of the Commonwealth Bank of Australia and the entities it controlled during the period.
Elizabeth O’Brien
Sydney
Partner
14 August 2024
PricewaterhouseCoopers
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, Sydney NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
134
Auditor’s Independence Declaration
Income Statements
For the year ended 30 June 2024
136
Group ¹
Bank
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 24
30 Jun 23
Note
$M
$M
$M
$M
$M
Interest income:
Effective interest income
2.1
57,397
43,182
23,987
52,396
38,954
Other interest income
2.1
3,647
1,293
306
3,710
1,332
Interest expense
2.1
(38,220)
(21,419)
(4,820)
(36,223)
(20,270)
Net interest income
22,824
23,056
19,473
19,883
20,016
Net other operating income ²
2.3
4,097
4,372
5,373
4,219
4,812
Total net operating income before operating
expenses and impairment
26,921
27,428
24,846
24,102
24,828
Operating expenses
2.4
(12,337)
(12,079)
(11,609)
(11,130)
(11,072)
Loan impairment (expense)/benefit
3.2
(802)
(1,108)
357
(715)
(1,021)
Net profit before income tax
13,782
14,241
13,594
12,257
12,735
Income tax expense
2.5
(4,301)
(4,145)
(4,002)
(3,644)
(3,455)
Net profit after income tax from continuing
operations
9,481
10,096
9,592
8,613
9,280
Net (loss)/profit after income tax from discontinued
operations
11.3
(87)
(98)
1,098
–
–
Net profit after income tax
9,394
9,998
10,690
8,613
9,280
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 Net other operating income is presented net of directly attributable fees and commission expenses, depreciation and impairment charges.
The above Income Statements should be read in conjunction with the accompanying notes.
Earnings per share for profit attributable to equity holders of the Bank for the year:
Group ¹
30 Jun 24
30 Jun 23
30 Jun 22
Cents per share
Earnings per share from continuing operations:
Basic
566.6
597.5
557.0
Diluted
562.7
584.2
537.1
Earnings per share:
Basic
561.4
591.7
620.7
Diluted
557.8
578.7
597.0
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
136
Statements of Comprehensive Income
For the year ended 30 June 2024
137
CBA FINANCIAL REPORT
2024 Annual report
Group ¹
Bank ¹
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 24
30 Jun 23
$M
$M
$M
$M
$M
Net profit after income tax for the period from
continuing operations
9,481
10,096
9,592
8,613
9,280
Other comprehensive income/(expense):
Items that may be reclassified subsequently to
profit/(loss):
Foreign currency translation reserve net of tax
(35)
229
(281)
–
33
Gains/(losses) on cash flow hedging instruments net of tax
310
(961)
(1,326)
733
(896)
Losses on debt investment securities at fair value through
other comprehensive income net of tax
(464)
(229)
(508)
(463)
(203)
Total of items that may be reclassified
(189)
(961)
(2,115)
270
(1,066)
Items that will not be reclassified to profit/(loss):
Actuarial (losses)/gains from defined benefit
superannuation plans net of tax
(168)
(12)
76
(166)
(12)
Gains/(losses) on equity investment securities at fair value
through other comprehensive income net of tax
310
(430)
(2,199)
310
(412)
Revaluation of properties net of tax
15
19
30
14
24
Total of items that will not be reclassified
157
(423)
(2,093)
158
(400)
Other comprehensive (expense)/income net of income
tax from continuing operations
(32)
(1,384)
(4,208)
428
(1,466)
Total comprehensive income for the period from
continuing operations:
9,449
8,712
5,384
9,041
7,814
Net (loss)/profit after income tax from discontinued
operations
(87)
(98)
1,098
–
–
Total comprehensive income for the period attributable
to equity holders of the Bank
9,362
8,614
6,482
9,041
7,814
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
The above Statements of Comprehensive Income should be read in conjunction with the accompanying notes.
Group
30 Jun 24
30 Jun 23
30 Jun 22
Note
Cents per share
Dividends per share attributable to shareholders of the Bank:
Ordinary shares
8.4
465
450
385
137
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Balance Sheets
As at 30 June 2024
138
Group ¹
Bank ¹
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
Note
$M
$M
$M
$M
Assets
Cash and liquid assets
5.1
83,080
116,619
78,255
108,367
Receivables from financial institutions
5.2
5,862
6,079
5,428
5,422
Assets at fair value through income statement
5.3
79,033
67,627
79,194
67,641
Derivative assets
5.4
18,058
23,945
19,797
25,585
Investment securities:
At amortised cost
5.5
1,239
2,032
1,239
2,032
At fair value through other comprehensive income
5.5
96,774
84,671
87,847
77,831
Assets held for sale
11.3
870
5
3
5
Loans and other receivables
3.1
942,210
926,082
834,024
816,140
Shares in and loans to controlled entities
11.2
–
–
58,228
54,636
Property, plant and equipment
6.1
3,676
4,950
3,331
3,549
Investments in associates and joint ventures
11.1
1,671
1,827
951
1,066
Intangible assets
6.2
7,600
7,393
4,581
4,340
Deferred tax assets
2.5
3,771
3,811
3,443
3,640
Other assets
6.3
10,232
7,382
9,609
6,799
Total assets
1,254,076
1,252,423
1,185,930
1,177,053
Liabilities
Deposits and other public borrowings
4.1
882,922
864,995
802,882
786,267
Payables to financial institutions
5.2
24,633
21,910
24,136
21,266
Liabilities at fair value through income statement
4.2
47,341
40,103
46,911
39,148
Derivative liabilities
5.4
18,850
25,347
20,040
26,728
Due to controlled entities
–
–
48,158
42,586
Current tax liabilities
503
671
363
442
Deferred tax liabilities
2.5
111
88
111
88
Provisions
7.1
2,908
3,013
2,681
2,818
Term funding from central banks
4.4
4,228
54,220
–
49,637
Debt issues
4.3
144,530
122,267
120,834
95,893
Bills payable and other liabilities
7.2
19,024
15,578
18,102
14,932
1,145,050
1,148,192
1,084,218
1,079,805
Loan capital
8.2
35,938
32,598
35,931
32,587
Total liabilities
1,180,988
1,180,790
1,120,149
1,112,392
Net assets
73,088
71,633
65,781
64,661
Shareholders' equity
Ordinary share capital
8.3
33,635
33,913
33,652
33,949
Reserves
8.3
(2,147)
(2,295)
(1,757)
(2,363)
Retained profits
8.3
41,600
40,010
33,886
33,075
Shareholders' equity attributable to equity holders of the Bank
73,088
71,628
65,781
64,661
Non-controlling interests
–
5
–
–
Total Shareholders' equity
73,088
71,633
65,781
64,661
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
The above Balance Sheets should be read in conjunction with the accompanying notes.
138
Statements of Changes in Equity
For the year ended 30 June 2024
139
CBA FINANCIAL REPORT
2024 Annual report
Group
Ordinary
share capital
Reserves
Retained
profits
Total
Non-
controlling
interests
Total
shareholders'
equity
$M
$M
$M
$M
$M
$M
As at 30 June 2022
36,467
(460)
36,826
72,833
5
72,838
Prior period change ¹
–
(458)
305
(153)
–
(153)
Revised opening balance
36,467
(918)
37,131
72,680
5
72,685
Net profit after income tax from continuing
operations ¹
–
–
10,096
10,096
–
10,096
Net loss after income tax from discontinued
operations
–
–
(98)
(98)
–
(98)
Net other comprehensive expense from
continuing operations ¹
–
(1,372)
(12)
(1,384)
–
(1,384)
Total comprehensive (expense)/income for the
period ¹
–
(1,372)
9,986
8,614
–
8,614
Transactions with equity holders in their
capacity as equity holders:
Share buy-backs ²
(2,533)
–
–
(2,533)
–
(2,533)
Dividends paid on ordinary shares
–
–
(7,117)
(7,117)
–
(7,117)
Share-based payments
–
5
–
5
–
5
Purchase of treasury shares
(101)
–
–
(101)
–
(101)
Sale and vesting of treasury shares
80
–
–
80
–
80
Other changes
–
(10)
10
–
–
–
As at 30 June 2023
33,913
(2,295)
40,010
71,628
5
71,633
Net profit after income tax from continuing
operations
–
–
9,481
9,481
–
9,481
Net loss after income tax from discontinued
operations
–
–
(87)
(87)
–
(87)
Net other comprehensive income/(expense)
from continuing operations
–
136
(168)
(32)
–
(32)
Total comprehensive income for the period
–
136
9,226
9,362
–
9,362
Transactions with equity holders in their
capacity as equity holders:
Share buy-backs ³
(282)
–
–
(282)
–
(282)
Dividends paid on ordinary shares
–
–
(7,623)
(7,623)
–
(7,623)
Share-based payments
–
(1)
–
(1)
–
(1)
Purchase of treasury shares
(80)
–
–
(80)
–
(80)
Sale and vesting of treasury shares
84
–
–
84
–
84
Other changes
–
13
(13)
–
(5)
(5)
As at 30 June 2024
33,635
(2,147)
41,600
73,088
–
73,088
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 On 15 February 2023, the Group announced its intention to undertake an on-market share buy-back of up to $1 billion of CBA ordinary shares in addition to the
$2 billion announcement on 9 February 2022. During the year ended 30 June 2023, the Group completed the previously announced $3 billion on-market buy-backs
and bought back a total of 25,369,084 ordinary shares ($2,532 million) at an average price of $99.81. The Group recognised $1 million in transaction costs in relation
to the buy-backs. The shares bought back were subsequently cancelled.
3 On 9 August 2023, the Group announced its intention to conduct a further on-market share buy-back of up to $1 billion of CBA ordinary shares, with 2,588,964
ordinary shares bought back at an average price of $108.84 ($282 million) during the year ended 30 June 2024. The shares bought back were subsequently
cancelled.
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
139
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Statements of Changes in Equity (continued)
For the year ended 30 June 2024
140
Bank
Ordinary
share capital
Reserves
Retained
profits
Total
$M
$M
$M
$M
As at 30 June 2022
36,491
(544)
30,177
66,124
Prior period change ¹
–
(359)
736
377
Revised opening balance
36,491
(903)
30,913
66,501
Net profit after income tax from continuing operations
–
–
9,280
9,280
Net other comprehensive expense from continuing operations ¹
–
(1,454)
(12)
(1,466)
Total comprehensive (expense)/income for the period ¹
–
(1,454)
9,268
7,814
Transactions with equity holders in their capacity as equity holders:
Share buy-backs ²
(2,533)
–
–
(2,533)
Dividends paid on ordinary shares
–
–
(7,117)
(7,117)
Share-based payments
–
5
–
5
Purchase of treasury shares
(64)
–
–
(64)
Sale and vesting of treasury shares
55
–
–
55
Other changes
–
(11)
11
–
As at 30 June 2023
33,949
(2,363)
33,075
64,661
Net profit after income tax from continuing operations
–
–
8,613
8,613
Net other comprehensive income/(expense) from continuing operations
–
594
(166)
428
Total comprehensive income for the period
–
594
8,447
9,041
Transactions with equity holders in their capacity as equity holders:
Share buy-backs ³
(282)
–
–
(282)
Dividends paid on ordinary shares
–
–
(7,623)
(7,623)
Share-based payments
–
(1)
–
(1)
Purchase of treasury shares
(66)
–
–
(66)
Sale and vesting of treasury shares
51
–
–
51
Other changes
–
13
(13)
–
As at 30 June 2024
33,652
(1,757)
33,886
65,781
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 On 15 February 2023, the Group announced its intention to undertake an on-market share buy-back of up to $1 billion of CBA ordinary shares in addition to the
$2 billion announcement on 9 February 2022. During the year ended 30 June 2023, the Group completed the previously announced $3 billion on-market buy-backs
and bought back a total of 25,369,084 ordinary shares ($2,532 million) at an average price of $99.81. The Group recognised $1 million in transaction costs in relation
to the buy-backs. The shares bought back were subsequently cancelled.
3 On 9 August 2023, the Group announced its intention to conduct a further on-market share buy-back of up to $1 billion of CBA ordinary shares, with 2,588,964
ordinary shares bought back at an average price of $108.84 ($282 million) during the year ended 30 June 2024. The shares bought back were subsequently
cancelled.
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
140
Statements of Cash Flows
For the year ended 30 June 2024
141
CBA FINANCIAL REPORT
2024 Annual report
Group ¹ ²
Bank ¹
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 24
30 Jun 23
Note
$M
$M
$M
$M
$M
Cash flows from operating activities
Interest received
59,431
43,286
24,744
54,469
39,016
Interest paid
(34,843)
(18,212)
(4,432)
(32,893)
(17,561)
Other operating income received
3,548
3,240
3,562
2,816
2,737
Expenses paid
(10,951)
(11,207)
(11,027)
(9,858)
(10,245)
Income taxes paid
(4,308)
(3,871)
(3,530)
(3,677)
(3,332)
Insurance business:
Investment income
–
–
(6)
–
–
Premiums received ³
–
183
698
–
–
Policy payments and commission expense ³
–
(208)
(620)
–
–
Cash flows from operating activities before changes in
operating assets and liabilities
12,877
13,211
9,389
10,857
10,615
Changes in operating assets and liabilities arising
from cash flow movements
Movement in investment securities:
Purchases
(71,318)
(34,641)
(34,472)
(64,836)
(31,963)
Proceeds
60,055
30,050
34,957
55,832
27,256
Net (increase)/decrease in assets at fair value through
income statement
(11,000)
(36,874)
14,587
(11,296)
(36,344)
Net increase in loans and other receivables
(25,475)
(46,102)
(68,250)
(26,025)
(43,598)
Net (increase)/decrease in receivables from financial
institutions
(9)
1,230
(1,747)
29
1,116
Net (increase)/decrease in securities purchased under
agreements to resell at amortised cost
(26,207)
34,690
(29,888)
(25,609)
34,431
Net increase in other assets
(532)
(943)
(795)
(531)
(624)
Net increase in deposits and other public borrowings
22,542
38,385
79,739
19,775
35,157
Net increase/(decrease) in payables to financial institutions
2,801
(5,258)
7,425
2,947
(5,126)
Net increase/(decrease) in securities sold under agreements
to repurchase at amortised cost
3,168
(34,996)
13,846
3,079
(35,019)
Net increase/(decrease) in other liabilities at fair value
through income statement
7,494
32,814
(1,516)
8,053
33,098
Net (decrease)/increase in other liabilities
(19)
44
(35)
(87)
24
Changes in operating assets and liabilities arising from
cash flow movements
(38,500)
(21,601)
13,851
(38,669)
(21,592)
Net cash (used in)/provided by operating
activities
12.2 (a)
(25,623)
(8,390)
23,240
(27,812)
(10,977)
1 It should be noted that the Group does not use these accounting Statements of Cash Flows in the internal management of its liquidity positions.
2 Comparative information includes discontinued operations. For the cash flows from discontinued operations, refer to Note 11.3.
3 Represents gross premiums and policy payments before splitting between policyholders and shareholders.
141
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Statements of Cash Flows (continued)
For the year ended 30 June 2024
142
Group ¹ ²
Bank ¹
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 24
30 Jun 23
Note
$M
$M
$M
$M
$M
Cash flows from investing activities
Cash outflows from acquisitions of controlled entities (net of
cash acquired)
(9)
–
–
–
–
Cash inflows from disposals of associates and joint ventures
–
–
1,789
–
–
Cash outflows from acquisitions of associates and joint
ventures
(25)
(41)
(256)
(25)
(37)
Cash inflows from disposal of controlled entities (net of cash
disposed of)
123
567
1,975
188
–
Dividends received
94
95
30
1,126
1,233
Net cashflows received from controlled entities ³
–
–
–
1,595
3,292
Proceeds from sales of property, plant and equipment
25
74
108
8
41
Purchases of property, plant and equipment
(401)
(683)
(231)
(344)
(349)
Purchases of intangible assets
(921)
(885)
(746)
(826)
(769)
Net cash (used in)/provided by investing activities
(1,114)
(873)
2,669
1,722
3,411
Cash flows from financing activities
Share buy-backs
(282)
(2,533)
(6,471)
(282)
(2,533)
Dividends paid (excluding Dividend Reinvestment Plan)
(7,623)
(7,117)
(6,535)
(7,623)
(7,117)
Proceeds from issuance of debt securities
52,455
51,833
61,921
46,738
43,462
Redemption of debt securities
(30,910)
(49,329)
(45,879)
(22,194)
(39,641)
(Maturity of)/proceeds from term funding from central banks
(49,957)
(598)
2,951
(49,637)
(1,500)
Purchases of treasury shares
(80)
(101)
(76)
(66)
(64)
Sales of treasury shares
–
–
48
–
–
Proceeds from issuance of loan capital
5,155
7,665
6,815
5,151
7,673
Redemption of loan capital
(1,590)
(3,043)
(6,540)
(1,590)
(3,043)
Payments for the principal portion of lease liabilities
(420)
(525)
(523)
(397)
(470)
Net cash (used in)/provided by financing activities
(33,252)
(3,748)
5,711
(29,900)
(3,233)
Net (decrease)/increase in cash and cash equivalents
(59,989)
(13,011)
31,620
(55,990)
(10,799)
Effect of foreign exchange rates on cash and cash
equivalents
138
828
355
156
279
Cash and cash equivalents at beginning of year
107,172
119,355
87,380
98,730
109,250
Cash and cash equivalents at end of year
12.2 (b)
47,321
107,172
119,355
42,896
98,730
1 It should be noted that the Group does not use these accounting Statements of Cash Flows in the internal management of its liquidity positions.
2 Comparative information includes discontinued operations. For the cash flows from discontinued operations, refer to Note 11.3.
3 Amounts received from/(paid to) controlled entities are presented in line with how they are managed and settled.
The above Statements of Cash Flows should be read in conjunction with the accompanying notes.
142
Notes to the Financial Statements
For the year ended 30 June 2024
143
CBA FINANCIAL REPORT
2024 Annual report
1
Overview
1.1
General information, basis of accounting, changes in accounting policies and future
accounting developments
General information
The Financial Report of the Commonwealth Bank of Australia (the Bank) and the Bank and its subsidiaries (the Group) for the year
ended 30 June 2024, was approved and authorised for issue by the Board of Directors on 14 August 2024. The Directors have the
power to amend and reissue the financial statements.
The Bank is a for-profit entity incorporated and domiciled in Australia. It is a company limited by shares that are publicly traded on the
Australian Securities Exchange. The registered office is Commonwealth Bank Place South, Level 1, 11 Harbour Street, NSW 2000,
Australia.
The Financial Report includes the consolidated and standalone financial statements of the Group and the Bank, respectively. Notes
accompanying the financial statements, the consolidated entity disclosure statement and the Directors’ declaration form part of the
Financial Report.
On 1 May 2024, the Group completed the sale of its 99% shareholding in PT Bank Commonwealth (PTBC) to PT Bank OCBC NISP Tbk
(OCBC Indonesia), a subsidiary of Oversea-Chinese Banking Corporation Limited (OCBC).
There have been no other significant changes in the nature of the principal activities of the Group during the year.
Basis of accounting
The Financial Report:
• is a general purpose financial report;
• has been prepared in accordance with the Australian Accounting Standards adopted by the Australian Accounting Standards Board
(AASB) and International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB);
• has been prepared in accordance with the requirements of the Corporations Act 2001 (Cth);
• is presented in Australian dollars, which is the Bank’s functional and presentation currency, with all values rounded to the nearest
million dollars ($M) in accordance with ASIC Corporations Instrument 2016/191 unless otherwise indicated;
• includes foreign currency transactions that are translated into the functional currency, using the exchange rates prevailing at the date
of each transaction;
• has been prepared on a going concern basis using a historical cost basis, except for certain assets and liabilities (including derivative
instruments) measured at fair value;
• presents assets and liabilities on the face of the Balance Sheets in decreasing order of liquidity;
• where required, presents restated comparative information for consistency with the current year’s presentation in the Financial
Report; and
• contains accounting policies that have been consistently applied to all periods presented, unless otherwise stated.
Changes in comparatives
Discontinued operations
The financial results of businesses reclassified as discontinued operations are excluded from the results of the continuing operations
and presented as a single line item net profit/(loss) after income tax from discontinued operations in the Income Statement, and other
comprehensive income/(expense) net of income tax from discontinued operations in the Statement of Comprehensive Income.
The Income Statements and the Statements of Comprehensive Income for comparative periods are also restated. Assets and liabilities
of discontinued operations subject to disposal have been presented on the Balance Sheet separately as assets and liabilities held for
sale. The Balance Sheet is not restated when a business is reclassified as a discontinued operation.
Re-segmentation
During the year ended 30 June 2024, the Group made a number of re-segmentations, allocations and reclassifications including the
transfer of some customers between segments and refinements to the allocation of costs to support units. These changes have not
impacted the Group’s net profit but have resulted in changes to the presentation of the Income Statement and the Balance Sheet of the
affected segments. These changes have been applied retrospectively. Refer to Note 2.7 for further information.
143
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
144
1.1
General information, basis of accounting, changes in accounting policies and future
accounting developments (continued)
Prior period adjustments
During the year ended 30 June 2024, management reassessed the classification of the Group’s investment in Qilu Bank in accordance
with AASB 128 Investments in Associates and Joint Ventures and concluded that the Group lost significant influence over financial and
operating policy decision making at the time of the Qilu Bank Initial Public Offering in June 2021. This change has been applied
retrospectively.
For the Group, the comparative information has been revised as follows:
• A decrease in investments in associates as at 30 June 2023 and 2022 of $1,021 million and $957 million, respectively;
• An increase in investments at fair value through other comprehensive income as at 30 June 2023 and 2022 of $599 million and
$779 million, respectively;
• A decrease in deferred tax liabilities as at 30 June 2023 and 2022 of $50 million and $25 million, respectively;
• A decrease in net other operating income for the years ended 30 June 2023 and 2022 of $102 million and $90 million, respectively;
• A decrease in income tax expense for the years ended 30 June 2023 and 2022 of $10 million and $9 million, respectively;
• A decrease in investment securities revaluation reserve as at 30 June 2023 and 2022 of $535 million and $370 million, respectively;
• A decrease in foreign currency translation reserve as at 30 June 2023 and 2022 of $50 million and $88 million, respectively;
• An increase in opening retained earnings as at 1 July 2022 for the Group of $305 million;
• A decrease in basic earnings per share and basic earnings per share from continuing operations for the years ended 30 June 2023
and 2022 of 5.5 cents per share and 4.7 cents per share, respectively; and
• A decrease in diluted earnings per share and diluted earnings per share from continuing operations for the years ended 30 June 2023
and 2022 of 5.1 cents per share and 4.4 cents per share, respectively.
For the Bank, the comparative information has been revised as follows:
• A decrease in investments in associates as at 30 June 2023 and 2022 of $364 million and $360 million, respectively;
• An increase in investments at fair value through other comprehensive income as at 30 June 2023 and 2022 of $599 million and
$779 million, respectively;
• An increase in deferred tax liabilities as at 30 June 2023 and 2022 of $24 million and $42 million, respectively;
• A decrease in investment securities revaluation reserve as at 30 June 2023 and 2022 of $525 million and $359 million, respectively;
and
• An increase in opening retained earnings as at 1 July 2022 of $736 million.
Adoption of new or amended accounting standards and future accounting developments
International Tax Reform – Pillar Two Model Rules
In December 2021, the Organisation for Economic Co-operation and Development (OECD) released Global Anti-Base Erosion (GLoBE)
Model rules (“Pillar Two”), introducing new ‘top-up’ taxing mechanisms for multinational enterprises (MNEs) that fall within the rules.
MNEs will be liable to pay a top-up tax reflecting the difference between their GloBE effective tax rate per jurisdiction and the 15%
minimum rate.
As at 30 June 2024, Pillar Two draft legislation has been released in Australia but not yet been enacted. Certain jurisdictions in which
the Group operates have enacted or substantively enacted Pillar Two legislation. The legislation will be effective for the Group for the
financial year beginning 1 July 2024.
In June 2023, the Australian Accounting Standards Board (AASB) issued AASB 2023-2 to amend AASB 112 Income Taxes in order to
address Pillar Two. It introduced a mandatory temporary exception from recognising and disclosing Pillar Two deferred taxes, which has
been adopted by the Group.
The Group has performed an assessment of the potential exposure to Pillar Two income taxes. The Group does not operate in
jurisdictions that have a headline corporate tax rate of less than 15% and does not expect to pay any Pillar Two top-up taxes. In the
unlikely event that Pillar Two taxes become payable, the Group does not expect the impact to be material.
144
Notes to the Financial Statements
For the year ended 30 June 2024
145
CBA FINANCIAL REPORT
2024 Annual report
1.1
General information, basis of accounting, changes in accounting policies and future
accounting developments (continued)
Multinational Tax Transparency – Disclosure of Subsidiaries
During the year ended 30 June 2024, the Corporations Act 2001 (Cth) was amended to introduce new mandatory annual disclosures for
public companies required to prepare consolidated financial statements. The amendments were made as part of the Government’s
commitment to protect the integrity of the Australian tax system and improve tax transparency. The new disclosures include names,
legal structures, locations of incorporation or formation, and tax residency status of consolidated entities. The new disclosure
requirement is effective for the year ended 30 June 2024. The Group’s consolidated entity disclosure statement is provided on
pages 286 – 288 of this Financial Report.
AASB 18 Presentation and Disclosure in Financial Statements
In June 2024, the AASB issued a new standard AASB 18 Presentation and Disclosure in Financial Statements, which will be effective
for the Group from 1 July 2027 and is required to be applied retrospectively. AASB 18 will replace AASB 101 Presentation of Financial
Statements and introduces new requirements to improve entities’ reporting of financial performance and give investors a better basis for
analysing and comparing entities. These requirements aim to improve comparability in the income statement, enhance transparency of
management-defined performance measures and provide useful grouping of information in the financial statements. The Group
continues to assess the impact of adopting AASB 18.
145
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
146
2
Our performance
OVERVIEW
The Group earns its returns from providing a broad range of banking products and services to retail and wholesale customers in
Australia, New Zealand and other jurisdictions.
Lending and deposit taking are the Group’s primary business activities with net interest income being the main contributor to the
Group’s results. Net interest income is derived from the difference between interest earned on lending and investment assets and
interest incurred on customer deposits and wholesale debt raised to fund these assets.
The Group further generates income from lending fees and commissions and trading activities. It also incurs costs associated with
running the business such as staff, occupancy and technology related expenses.
The Performance section provides details of the main contributors to the Group’s returns and analysis of its financial performance by
business segments and geographical regions.
2.1
Net interest income
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 24
30 Jun 23
$M
$M
$M
$M
$M
Interest income
Effective interest income:
Loans and other receivables
46,895
35,820
23,173
40,228
31,416
Other financial institutions
290
206
20
258
197
Cash and liquid assets
4,831
4,115
254
4,438
3,794
Investment securities:
At amortised cost
83
101
49
84
101
At fair value through other comprehensive income
5,298
2,940
491
4,781
2,620
Controlled entities
–
–
–
2,607
826
Total effective interest income
57,397
43,182
23,987
52,396
38,954
Other interest income:
Assets at fair value through income statement
3,539
1,190
201
3,539
1,190
Controlled entities
–
–
–
72
48
Other
108
103
105
99
94
Total other interest income
3,647
1,293
306
3,710
1,332
Total interest income
61,044
44,475
24,293
56,106
40,286
Interest expense
Deposits
23,993
12,726
2,420
21,334
11,493
Other financial institutions
1,228
844
94
1,168
784
Liabilities at fair value through income statement
2,064
634
105
2,035
645
Term funding from central banks
278
257
99
37
80
Debt issues
7,822
4,873
997
6,491
3,574
Loan capital
2,326
1,615
687
2,329
1,616
Lease liabilities
82
77
75
71
67
Bank levy
427
393
343
427
393
Controlled entities
–
–
–
2,331
1,618
Total interest expense
38,220
21,419
4,820
36,223
20,270
Net interest income
22,824
23,056
19,473
19,883
20,016
146
Notes to the Financial Statements
For the year ended 30 June 2024
147
CBA FINANCIAL REPORT
2024 Annual report
2.1
Net interest income (continued)
ACCOUNTING POLICIES
Interest income and interest expense on financial assets and liabilities measured at amortised cost, and debt financial assets measured
at fair value through other comprehensive income (OCI), are recognised using the effective interest method. Interest income recognition
for these categories of financial assets depends on the expected credit losses (ECL) stage they are allocated to in accordance with the
Group’s ECL methodology. For financial assets classified within Stage 1 and Stage 2 interest income is calculated by applying the
effective interest rate to the gross carrying amount of the assets. Interest income on financial assets in Stage 3 is recognised by
applying the effective interest rate to the gross carrying amount net of provisions for impairment. For details on the Group’s ECL
methodology refer to Note 3.2.
Fees, transaction costs and issue costs integral to financial assets and liabilities are capitalised and included in the interest recognised
over the expected life of the instrument. This includes establishment fees for providing a loan or a lease arrangement. Facility and line
fees in relation to commitments made under credit facilities where drawdown is assessed as probable are considered an integral part of
the effective interest rate and are recognised in net interest income.
Interest income on finance leases is recognised over the life of the lease, consistent with the outstanding investment and unearned
income balance.
Interest income and expense on financial assets and liabilities that are classified at fair value through the income statement are
accounted for on a contractual rate basis and include amortisation of premium/discounts.
Interest expense also includes payments made under a liquidity facility arrangement with the Reserve Bank of Australia, the Major Bank
Levy (Bank Levy) expense and other financing charges.
147
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
148
2.2
Average balances and related interest
The following information has been produced using statutory Balance Sheet and Income Statement categories. The tables below list the
major categories of interest earning assets and interest bearing liabilities of the Group together with the respective interest earned or
paid and the average interest rate for the years ended 30 June 2024, 30 June 2023 and 30 June 2022. Interest is accounted for based
on product yield. Where assets or liabilities are hedged, the amounts are shown net of the hedge, but individual items not separately
hedged may be affected by movements in exchange rates and interest rates. The overseas component comprises overseas branches of
the Bank and overseas domiciled controlled entities of the Group. Non-accrual loans are included in interest earning assets under loans
and other receivables. During the year ended 30 June 2024, the official cash rate in Australia increased by 25 basis points to 4.35%
while the official cash rate in New Zealand remained at 5.5% on a spot basis (2023: 325 basis points increase for Australia and 350
basis points increase for New Zealand; 2022: 75 basis points increase for Australia and 175 basis points increase for New Zealand).
Group
30 Jun 24
30 Jun 23
30 Jun 22
Average
balance
Interest
Average
rate
Average
balance
Interest
Average
rate
Average
balance
Interest
Average
rate
Interest earning assets
$M
$M
%
$M
$M
%
$M
$M
%
Cash and liquid assets
Australia
75,988
3,243
4.3
103,720
2,942
2.8
95,587
103
0.1
Overseas
28,768
1,588
5.5
38,346
1,173
3.1
32,004
151
0.5
Receivables from financial institutions
Australia
2,280
79
3.5
2,590
49
1.9
2,617
(5)
(0.2)
Overseas
3,545
211
6.0
4,793
157
3.3
3,197
25
0.8
Assets at fair value through income
statement:
Australia
48,665
2,023
4.2
27,956
831
3.0
20,610
205
1.0
Overseas
28,799
1,516
5.3
13,609
359
2.6
3,618
(4)
(0.1)
Investment securities:
At amortised cost
Australia
1,627
83
5.1
2,601
101
3.9
3,938
49
1.2
At fair value through OCI
Australia
78,795
3,963
5.0
64,014
2,211
3.5
64,453
345
0.5
Overseas
23,162
1,335
5.8
17,024
729
4.3
16,344
146
0.9
Loans and other receivables
Australia ¹
734,774
39,550
5.4
720,419
30,160
4.2
667,934
19,460
2.9
Overseas
117,954
7,453
6.3
116,182
5,763
5.0
116,608
3,818
3.3
Total interest earning assets and
interest income
1,144,357
61,044
5.3
1,111,254
44,475
4.0
1,026,910
24,293
2.4
1 Net of average mortgage offset balances that are included in non-interest earning assets. Average mortgage offset balances for the year ended 30 June 2024 was
$74,730 million (30 June 2023: $69,717 million; 30 June 2022: $64,748 million). While under the accounting standards loans and other receivables balances are
required to be presented on gross basis, they are presented net of mortgage offset balances for the calculation of customer interest payments and the Group’s net
interest margin.
148
Notes to the Financial Statements
For the year ended 30 June 2024
149
CBA FINANCIAL REPORT
2024 Annual report
2.2
Average balances and related interest (continued)
Group ¹
Average balance
30 Jun 24
30 Jun 23
30 Jun 22
Non-interest earning assets
$M
$M
$M
Property, plant and equipment
Australia
3,794
4,431
4,468
Overseas
816
426
486
Other assets
Australia ²
102,099
100,862
109,671
Overseas
20,823
21,663
9,728
Provisions for impairment
Australia
(5,171)
(4,748)
(4,032)
Overseas
(648)
(652)
(724)
Total non-interest earning assets
121,713
121,982
119,597
Assets held for sale
Australia
44
466
2,094
Overseas
626
–
–
Total assets
1,266,740
1,233,702
1,148,601
Percentage of total assets applicable to overseas operations (%)
17.7
17.1
15.8
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 For the purpose of reconciling total average assets, other assets include average mortgage offset balances as these balances are excluded from the average
interest earning assets. Average mortgage offset balances for the year ended 30 June 2024 were $74,730 million (30 June 2023: $69,717 million; 30 June 2022:
$64,748 million).
149
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
150
2.2
Average balances and related interest (continued)
Group
30 Jun 24
30 Jun 23
30 Jun 22
Average
balance
Interest
Average
rate
Average
balance
Interest
Average
rate
Average
balance
Interest
Average
rate
Interest bearing liabilities
$M
$M
%
$M
$M
%
$M
$M
%
Time deposits
Australia ¹
204,049
8,848
4.3
189,801
4,172
2.2
157,909
1,061
0.7
Overseas
64,700
3,132
4.8
67,262
2,776
4.1
59,344
597
1.0
Saving deposits
Australia ¹
231,475
6,203
2.7
210,296
2,625
1.2
202,729
299
0.1
Overseas
19,131
619
3.2
20,350
162
0.8
23,040
106
0.5
Other demand deposits
Australia
157,319
4,853
3.1
166,953
2,806
1.7
157,998
293
0.2
Overseas
12,405
338
2.7
13,078
185
1.4
13,955
64
0.5
Payables to
financial institutions
Australia
11,804
530
4.5
10,542
410
3.9
12,221
36
0.3
Overseas
12,705
698
5.5
12,657
434
3.4
10,000
58
0.6
Liabilities at fair value
through income statement
Australia
15,726
875
5.6
10,510
370
3.5
3,834
96
2.5
Overseas
29,717
1,189
4.0
11,797
264
2.2
4,255
9
0.2
Term funding from
central banks
Australia
32,746
37
0.1
51,118
80
0.2
51,137
80
0.2
Overseas
4,499
241
5.4
4,481
177
4.0
2,016
19
0.9
Debt issues
Australia
115,428
6,462
5.6
96,999
4,077
4.2
94,418
703
0.7
Overseas
23,214
1,360
5.9
20,475
796
3.9
16,651
294
1.8
Loan capital
Australia
33,987
2,326
6.8
28,305
1,562
5.5
24,329
557
2.3
Overseas
–
–
–
1,252
53
4.2
4,861
130
2.7
Lease liabilities
Australia
2,328
69
3.0
2,530
65
2.6
2,707
64
2.4
Overseas
233
13
5.6
260
12
4.6
291
11
3.8
Bank levy
Australia
–
427
–
–
393
–
–
343
–
Total interest bearing
liabilities and interest
expense
971,466
38,220
3.9
918,666
21,419
2.3
841,695
4,820
0.6
1 Net of average mortgage offset balances that are included in non-interest bearing liabilities.
150
Notes to the Financial Statements
For the year ended 30 June 2024
151
CBA FINANCIAL REPORT
2024 Annual report
2.2
Average balances and related interest (continued)
Group ¹
Average balance
30 Jun 24
30 Jun 23
30 Jun 22
Non-interest bearing liabilities
$M
$M
$M
Deposits not bearing interest
Australia ²
176,298
191,151
184,771
Overseas
9,331
10,891
12,370
Other liabilities
Australia
21,696
23,764
24,943
Overseas
14,941
16,598
8,508
Total non-interest bearing liabilities
222,266
242,404
230,592
Liabilities held for sale
Australia
–
419
1,071
Overseas
488
–
–
Total liabilities
1,194,220
1,161,489
1,073,358
Shareholders' equity
72,520
72,213
75,243
Total liabilities and Shareholders' equity
1,266,740
1,233,702
1,148,601
Percentage of total liabilities applicable to overseas operations (%)
16.0
15.4
14.5
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 Includes average mortgage offset balances.
151
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
152
2.2
Average balances and related interest (continued)
Changes in net interest income: volume and rate analysis
The following tables show the movement in interest income and expense due to changes in volume and interest rates from prior
periods. Volume variances reflect the changes in interest due to movements in the average balance. Rate variances reflect the change
in interest due to changes in interest rates. When the change cannot be isolated to either volume or rate, it has been allocated to
volume. Volume and rate variance for total interest earning assets and interest bearing liabilities have been calculated separately (rather
than being the sum of the individual categories).
June 2024 vs June 2023
June 2023 vs June 2022
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
(1,184)
1,485
301
231
2,608
2,839
Overseas
(529)
944
415
194
828
1,022
Receivables from financial institutions
Australia
(11)
41
30
(1)
55
54
Overseas
(74)
128
54
52
80
132
Assets at fair value through income
statement:
At amortised cost
Australia
861
331
1,192
218
408
626
Overseas
800
357
1,157
264
99
363
Investment securities:
At amortised cost
Australia
(50)
32
(18)
(52)
104
52
At fair value through OCI
Australia
743
1,009
1,752
(15)
1,881
1,866
Overseas
354
252
606
29
554
583
Loans and other receivables
Australia
773
8,617
9,390
2,197
8,503
10,700
Overseas
112
1,578
1,690
(21)
1,966
1,945
Changes in interest income
1,766
14,803
16,569
3,376
16,806
20,182
152
Notes to the Financial Statements
For the year ended 30 June 2024
153
CBA FINANCIAL REPORT
2024 Annual report
2.2
Average balances and related interest (continued)
June 2024 vs June 2023
June 2023 vs June 2022
Changes in net interest income:
Volume
Rate
Total
Volume
Rate
Total
Volume and rate analysis
$M
$M
$M
$M
$M
$M
Interest bearing liabilities and loan capital
Time deposits
Australia
618
4,058
4,676
701
2,410
3,111
Overseas
(124)
480
356
327
1,852
2,179
Saving deposits
Australia
568
3,010
3,578
94
2,232
2,326
Overseas
(39)
496
457
(21)
77
56
Other demand deposits
Australia
(297)
2,344
2,047
151
2,362
2,513
Overseas
(18)
171
153
(12)
133
121
Payables to financial institutions
Australia
57
63
120
(65)
439
374
Overseas
3
261
264
91
285
376
Liabilities at fair value through
income statement
Australia
290
215
505
235
39
274
Overseas
717
208
925
169
86
255
Term funding from central banks
Australia
(21)
(22)
(43)
–
–
–
Overseas
1
63
64
97
61
158
Debt issues
Australia
1,032
1,353
2,385
108
3,266
3,374
Overseas
160
404
564
149
353
502
Loan capital
Australia
389
375
764
219
786
1,005
Overseas
(53)
–
(53)
(153)
76
(77)
Lease liabilities
Australia
(6)
10
4
(5)
6
1
Overseas
(2)
3
1
(1)
2
1
Bank levy
Australia
–
34
34
–
50
50
Changes in interest expense
2,077
14,724
16,801
1,795
14,804
16,599
Changes in net interest income
660
(892)
(232)
1,750
1,833
3,583
153
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
154
2.3
Net other operating income
Group ¹
Bank
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 24
30 Jun 23
$M
$M
$M
$M
$M
Commission income
2,451
2,297
2,309
1,999
1,826
Commission expense ²
(335)
(317)
(231)
(281)
(265)
Net commission income
2,116
1,980
2,078
1,718
1,561
Lending fees
821
753
736
773
719
Trading income
1,125
1,095
806
1,020
989
Net (loss)/gain on non-trading financial instruments ³
(118)
268
420
(401)
11
Net (loss)/gain on sale of property, plant and equipment
(2)
(4)
12
(4)
(4)
Net (loss)/gain from hedging ineffectiveness
(33)
1
4
(13)
38
Dividends – Controlled entities
–
–
–
1,033
1,139
Dividends
55
55
28
93
94
Share of results of associates and joint ventures net of
impairment ⁴
(95)
(19)
894
(140)
(8)
Net insurance and funds management income
111
82
208
–
–
Other ⁵ ⁶
117
161
187
140
273
Total net other operating income
4,097
4,372
5,373
4,219
4,812
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 Includes expenses directly attributable to commission income generation such as credit card loyalty programs, card processing and certain other volume
related expenses.
3 Includes gains and losses on non-trading derivatives that are held for risk management purposes and gains and losses on disposal of businesses not classified as
discontinued operations. For details on disposals of businesses, refer to Note 11.3.
4 The year ended 30 June 2022 includes a pre-tax gain of $516 million arising from the partial disposal of the Group’s 10% interest in Bank of Hangzhou and the
reclassification of the retained 5.6% interest to investment securities at fair value through other comprehensive income.
5 The year ended 30 June 2024 includes depreciation of $58 million in relation to assets held as lessor by the Group (30 June 2023: $63 million; 30 June 2022:
$61 million). Includes depreciation of $4 million in relation to assets held for lease as lessor by the Bank (30 June 2023: $3 million).
6 The year ended 30 June 2024 includes a $50 million loss on reclassification of certain assets held as lessor to assets held for sale and remeasurement to fair value
less costs to sell. The years ended 30 June 2023 and 2022 include an impairment loss of $6 million and an impairment reversal of $68 million, respectively,
recognised by the Group in relation to certain aircraft owned by the Group and leased to various airlines. The impairment loss was driven by the impact of COVID-19
on the aviation sector.
154
Notes to the Financial Statements
For the year ended 30 June 2024
155
CBA FINANCIAL REPORT
2024 Annual report
2.3
Net other operating income
ACCOUNTING POLICIES
Lending fees and commission income are accounted for as follows:
• facility fees earned for managing and administering credit and other facilities for customers are generally charged to the customer on a
monthly or annual basis and are recognised as revenue over the service period. Annual fees that are not an integral part of the
effective interest rate are deferred on the Balance Sheet in bills payable and other liabilities and recognised on a straight-line basis
over the year. Transaction based fees are charged and recognised at the time of the transaction;
• commitment fees and fees in relation to guarantee arrangements are deferred and recognised over the life of the contractual
arrangements;
• fee income is earned for providing advisory or arrangement services, placement and underwriting services. These fees are recognised
when the related service is completed which is typically at the time of the transaction;
• the Group assesses whether the nature of the arrangement with its customer is as a principal provider or an agent of another party.
Where the Group acts as an agent for another party, the income earned by the Group is the net consideration received. As an agent,
the net consideration represents fee income for facilitating the transaction between the customer and the third party provider with the
primary responsibility for fulfilling the contract; and
• commission income is presented net of directly attributable incremental external costs. Directly attributable incremental costs are the
costs that would not have been incurred if a specific service had not been provided to a customer. These costs include the costs
associated with credit card loyalty programs which are recognised as an expense when the services are provided on the redemption of
points, cards processing expenses and certain other volume related expenses.
Establishment fees on financing facilities are deferred and amortised to interest income over the expected life of the loan and are not
recognised when the commitment is issued.
Trading income represents both realised and unrealised gains and losses from changes in the fair value of trading assets, liabilities and
derivatives, which are recognised in the period in which they arise.
Net gain/(loss) on non-trading financial instruments includes realised and unrealised gains and losses from non-trading financial assets
and liabilities, as well as realised and unrealised gains and losses on non-trading derivatives that are held for risk management
purposes.
Net gain/(loss) on the disposal of property, plant and equipment is the difference between proceeds received and its carrying value.
Net hedging ineffectiveness is measured on fair value, cash flow and net investment hedges.
Dividend income on non-trading equity investments is recognised on the ex-dividend date or when the right to receive payment
is established.
Funds management fees are recognised over the service period as the performance obligation is met and when it is highly probable that
the performance fee will not reverse.
The Group equity accounts for its share of the profits or losses of associate and joint venture investments, net of impairment recognised.
Dividends received are recognised as a reduction in the carrying amount of the investments.
Other income includes rental income on operating leases which is recognised on a straight-line basis over the lease term. This income
is presented net of depreciation and impairment expense on the associated operating lease assets held by the Group.
Other income also includes the impact of foreign currency revaluations for foreign currency monetary assets and liabilities. These assets
and liabilities are translated at the spot rate at the balance sheet date. Exchange differences arising upon settling or translating
monetary items at different rates to those at which they were initially recognised or previously reported, are recognised in the Income
Statement.
(continued)
155
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
156
2.4
Operating expenses
Group ¹
Bank ¹
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 24
30 Jun 23
$M
$M
$M
$M
$M
Staff expenses
Salaries and related on-costs
6,757
6,563
5,955
5,693
5,614
Share-based compensation
130
123
111
129
122
Superannuation
601
553
516
563
519
Total staff expenses
7,488
7,239
6,582
6,385
6,255
Occupancy and equipment expenses
Lease expenses ²
160
159
141
147
151
Depreciation of property, plant and equipment
623
602
640
534
522
Other occupancy expenses
212
189
197
181
159
Total occupancy and equipment expenses
995
950
978
862
832
Information technology services
System development and support
998
1,068
990
890
988
Infrastructure and support
300
331
335
272
298
Communications
110
129
156
98
115
Amortisation and write-offs of software assets
685
395
761
585
308
IT equipment depreciation
132
113
117
113
91
Total information technology services
2,225
2,036
2,359
1,958
1,800
Other expenses
Postage and stationery
145
138
131
133
130
Transaction processing and market data
107
93
94
84
73
Fees and commissions:
Professional fees
410
403
495
360
363
Other
92
92
127
83
82
Advertising and marketing
297
262
227
248
217
Non-lending losses
208
274
292
177
277
Impairment of investments in subsidiaries
–
–
–
8
103
Other
251
371
143
595
599
Total other expenses
1,510
1,633
1,509
1,688
1,844
Operating expenses before separation and transaction
costs
12,218
11,858
11,428
10,893
10,731
Separation and transaction costs
119
221
181
237
341
Total operating expenses
12,337
12,079
11,609
11,130
11,072
1 Comparative information has been restated to conform to presentation in the current period.
2 The year ended 30 June 2024 includes rentals of $32 million in relation to short-term leases and low value leases (30 June 2023: $56 million; 30 June 2022:
$59 million), and variable lease payments based on usage or performance of $3 million (30 June 2023: $5 million; 30 June 2022: $11 million).
156
Notes to the Financial Statements
For the year ended 30 June 2024
157
CBA FINANCIAL REPORT
2024 Annual report
2.4
Operating expenses (continued)
ACCOUNTING POLICIES
Salaries and related on-costs include annual leave, long service leave, employee incentives and relevant taxes. Staff expenses are
recognised over the period the employee renders the service. Long service leave is discounted to present value using assumptions
relating to staff departures, leave utilisation and future salary.
Share-based compensation includes plans which may be cash or equity settled. Cash settled share-based remuneration is recognised
as a liability and re-measured to fair value until settled. The changes in fair value are recognised as staff expenses. Equity settled
remuneration is fair valued at the grant date and amortised to staff expenses over the vesting period, with a corresponding increase in
the employee compensation reserve.
Superannuation expense includes expenses relating to defined contribution and defined benefit superannuation plans. Defined
contribution expense is recognised in the period the service is provided, whilst the defined benefit expense, which measures current and
past service costs, is determined by an actuarial calculation.
Occupancy and equipment expenses include depreciation which is calculated using the straight-line method over the asset’s estimated
useful life. Right-of-use assets are depreciated over the shorter of the lease term or the useful life of the underlying asset, with the
depreciation presented within depreciation of property, plant and equipment.
IT services expenses are recognised as incurred when the related services are delivered, unless they qualify for capitalisation as
computer software because they are identifiable and controlled in a way that allows future economic benefits to be obtained and others'
access to those benefits can be restricted. Capitalised computer software assets are amortised over their estimated useful life.
Software as a Service (SaaS) arrangements are service contracts providing the Group with the right to access the provider’s application
software over the contract period. Costs incurred to configure or customise, and the ongoing fees to obtain access to the provider's
application software, are recognised as operating expenses when the services are received. Costs incurred for the development of
software code that enhances, modifies or creates additional capability to existing on-premises systems and meets the recognition
criteria for an intangible asset are capitalised and amortised over their estimated useful life.
The Group assesses, at each balance sheet date, useful lives and residual values of capitalised software assets and property, plant and
equipment and whether there is any objective evidence of impairment. If an asset’s carrying value is greater than its recoverable
amount, the carrying amount is written down immediately to its recoverable amount.
Other expenses are recognised as the relevant service is rendered. Operating expenses related to provisions are recognised for present
obligations arising from past events where a payment to settle the obligation is probable and can be reliably estimated.
Critical accounting judgements and estimates
Actuarial valuations of the Group’s defined benefit superannuation plans’ obligations are dependent on a series of assumptions set out
in Note 10.2, including inflation rates, discount rates and salary growth rates. Changes in these assumptions impact the fair value of the
plans’ obligations, assets, superannuation expense and actuarial gains and losses recognised in Other Comprehensive Income.
Measurements of the Group’s share-based compensation is dependent on assumptions, including grant date fair values. Information on
these is set out in Note 10.1.
Refer to Note 6.2 for more information on the judgements and estimates associated with goodwill.
157
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
158
2.5
Income tax expense
The income tax expense for the year is determined from the profit before income tax as follows:
Group ¹
Bank
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 24
30 Jun 23
$M
$M
$M
$M
$M
Profit before income tax
13,782
14,241
13,594
12,257
12,735
Prima facie income tax at 30%
4,135
4,272
4,078
3,677
3,821
Effect of amounts which are non-deductible/
(assessable) in calculating taxable income:
Taxation offsets and other dividend adjustments
–
–
–
(330)
(362)
Offshore tax rate differential
(99)
(63)
(47)
(63)
(25)
Offshore banking unit
–
(52)
(47)
–
(33)
Effect of change in tax rates
(4)
(6)
17
(4)
(6)
Income tax over provided in previous years
–
(178)
(40)
(5)
(150)
Impact of divestments
100
19
60
141
6
Hybrid capital distributions
163
112
53
163
112
Other
6
41
(72)
65
92
Total income tax expense
4,301
4,145
4,002
3,644
3,455
Effective tax rate (%)
31.2
29.1
29.4
29.7
27.1
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
Group ¹
Bank
Income tax expense attributable to profit from
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 24
30 Jun 23
ordinary activities
$M
$M
$M
$M
$M
Australia
Current tax expense
3,497
3,583
3,045
3,386
3,436
Deferred tax expense/(benefit)
144
(128)
204
147
(109)
Total Australia
3,641
3,455
3,249
3,533
3,327
Overseas
Current tax expense
666
697
727
116
116
Deferred tax (benefit)/expense
(6)
(7)
26
(5)
12
Total overseas
660
690
753
111
128
Income tax expense attributable to profit from
ordinary activities
4,301
4,145
4,002
3,644
3,455
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
158
Notes to the Financial Statements
For the year ended 30 June 2024
159
CBA FINANCIAL REPORT
2024 Annual report
2.5
Income tax expense (continued)
Group ¹
Bank ¹
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 24
30 Jun 23
$M
$M
$M
$M
$M
Deferred tax asset balances comprise temporary
differences attributable to:
Amounts recognised in the income statement:
Lease liabilities
760
841
894
709
781
Provision for employee benefits
579
575
561
536
529
Provisions for impairment on loans and other receivables
1,791
1,729
1,500
1,618
1,563
Other provisions not tax deductible until expense incurred
428
579
779
409
542
Defined benefit superannuation plan
356
364
385
356
364
Unearned income
127
147
172
126
147
Intangible assets
191
219
240
190
219
Other
112
148
164
48
72
Total amount recognised in the income statement
4,344
4,602
4,695
3,992
4,217
Amounts recognised directly in other comprehensive
income:
Cash flow hedge reserve
640
859
431
525
842
Other reserves
348
271
78
349
271
Total amount recognised directly in other
comprehensive income
988
1,130
509
874
1,113
Total deferred tax assets (before set off)
5,332
5,732
5,204
4,866
5,330
Set off to tax
(1,561)
(1,921)
(2,031)
(1,423)
(1,690)
Net deferred tax assets
3,771
3,811
3,173
3,443
3,640
Deferred tax liability balances comprise temporary
differences attributable to:
Amounts recognised in the income statement:
Right-of-use assets
639
729
783
589
676
Lease financing relating to lessor activities
117
103
155
82
75
Intangible assets
56
57
56
56
56
Financial instruments
27
22
15
8
8
Investments in associates
171
170
340
170
169
Other
61
88
48
34
38
Total amount recognised in the income statement
1,071
1,169
1,397
939
1,022
Amounts recognised directly in other comprehensive
income:
Revaluation of properties
109
99
94
109
104
Foreign currency translation reserve
–
2
2
–
–
Cash flow hedge reserve
7
81
46
1
2
Defined benefit superannuation plan
474
546
546
474
546
Investment securities revaluation reserve
11
112
71
11
104
Total amount recognised directly in other
comprehensive income
601
840
759
595
756
Total deferred tax liabilities (before set off)
1,672
2,009
2,156
1,534
1,778
Set off to tax
(1,561)
(1,921)
(2,031)
(1,423)
(1,690)
Net deferred tax liabilities
111
88
125
111
88
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
159
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
160
2.5
Income tax expense (continued)
Unrecognised deferred tax assets and liabilities
As at 30 June 2024, the Group and the Bank had unrecognised deferred tax assets relating to unused tax losses of $22 million (30 June
2023: $58 million). The Group and the Bank had unrecognised deferred tax assets relating to unused capital losses of $20 million (30
June 2023: nil). Deferred tax assets have not been recognised in respect of these losses because it is not considered probable that
future taxable profit would be available against which they can be realised.
As at 30 June 2024, the Group had unrecognised deferred tax liabilities relating to undistributed profits of subsidiaries of $12 million
(30 June 2023: $6 million).
Tax consolidation
The amount receivable by the Bank under the tax funding agreement was $93 million as at 30 June 2024 (30 June 2023: $190 million).
This balance is included in “Other assets” in the Bank’s Balance Sheet.
ACCOUNTING POLICIES
Income tax on the profit or loss for the period comprises current and deferred tax.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the balance sheet date, and any
adjustment to tax payable in respect of previous years.
Deferred tax is calculated using the balance sheet method where temporary differences are identified by comparing the carrying
amounts of assets and liabilities for financial reporting purposes to their tax bases.
The amount of deferred tax recognised is based on the expected manner of realisation or settlement of the carrying amount of assets
and liabilities (i.e. through use or through sale), using tax rates which are expected to apply when the deferred tax asset is realised or
the deferred tax liability is settled.
The Group recognised and disclosed separate deferred tax assets and deferred tax liabilities arising from arrangements where the
Group is a lessee. Deferred tax assets and liabilities are offset where they relate to income tax levied by the same taxation authority on
either the same taxable entity or different taxable entities within the same taxable group.
The Bank and its wholly owned Australian subsidiaries elected to be treated as a single entity (“the tax consolidated group”) under the
tax consolidation regime from 1 July 2002. The members of the tax consolidated group have entered into tax funding and tax sharing
agreements, which set out the funding obligations and members.
Any current tax assets and liabilities and deferred tax assets from unused tax losses from subsidiaries in the tax consolidated group are
recognised by the Bank legal entity and funded in line with the tax funding arrangement.
The measurement and disclosure of deferred tax assets and liabilities have been performed on a modified stand-alone basis under UIG
1052 Tax Consolidation Accounting.
Critical accounting judgements and estimates
Provisions for taxation require significant judgement with respect to outcomes that are uncertain. For such uncertainties, the Group has
estimated the tax provisions based on the expected outcomes. A deferred tax asset is only recognised to the extent that it is probable
that future taxable profits will be available for it to be used against.
160
Notes to the Financial Statements
For the year ended 30 June 2024
161
CBA FINANCIAL REPORT
2024 Annual report
2.6
Earnings per share
Group ¹ ²
30 Jun 24
30 Jun 23
30 Jun 22
Earnings per ordinary share ³
Cents per share
Earnings per share from continuing operations:
Basic
566.6
597.5
557.0
Diluted
562.7
584.2
537.1
Earnings per share:
Basic
561.4
591.7
620.7
Diluted
557.8
578.7
597.0
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 The difference between earnings per share from continuing operations and earnings per share represents earnings per share from discontinued operations.
3 EPS calculations are based on actual amounts prior to rounding to the nearest million.
Group ¹
Reconciliation of earnings from continuing operations
30 Jun 24
30 Jun 23
30 Jun 22
used in calculation of earnings per share
$M
$M
$M
Profit after income tax from continuing operations
9,481
10,096
9,592
Continuing operations earnings used in calculation of basic earnings per share
9,481
10,096
9,592
Add: Profit impact of assumed conversions of loan capital
559
418
252
Continuing operations earnings used in calculation of fully diluted earnings per share
10,040
10,514
9,844
Reconciliation of earnings used in calculation of earnings per share
Continuing operations earnings used in calculation of basic earnings per share
9,481
10,096
9,592
Discontinued operations earnings used in calculation of basic earnings per share
(87)
(98)
1,098
Earnings used in calculation of basic earnings per share
9,394
9,998
10,690
Add: Profit impact of assumed conversions of loan capital
559
418
252
Earnings used in calculation of fully diluted earnings per share
9,953
10,416
10,942
Number of shares (in millions)
30 Jun 24
30 Jun 23
30 Jun 22
Weighted average number of ordinary shares used in calculation of basic earnings
per share
1,673
1,690
1,722
Effect of dilutive securities – executive share plans and convertible loan capital instruments
111
110
111
Weighted average number of ordinary shares used in calculation of fully diluted earnings
per share
1,784
1,800
1,833
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
ACCOUNTING POLICIES
Basic earnings per share (EPS) amounts are calculated by dividing the net profit for the year attributable to ordinary equity holders of
the Bank by the weighted average number of ordinary shares on issue during the year, adjusted for any bonus element included in
ordinary shares issued and excluding treasury shares held.
Diluted EPS is basic EPS adjusted for the impact of all securities on issue that can convert to CBA ordinary shares and would dilute
basic EPS on conversion. It is calculated by dividing net profit attributable to ordinary equity holders of the Bank (after adding back
interest on convertible loan capital instruments) by the weighted average number of ordinary shares outstanding during the year (as
calculated under basic earnings per share adjusted for the effects of dilutive convertible loan capital instruments and shares issuable
under executive share plans).
161
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
162
2.7
Financial reporting by segments
The principal activities of the Group are carried out in the business segments described below. These segments are based on the
distribution channels through which customer relationships are managed.
During the year ended 30 June 2024, there were re-segmentations, allocations and reclassifications, including the transfer of some
customers between Retail Banking Services, Business Banking and Institutional Banking and Markets segments, and refinements to the
allocation of support units costs. These changes have not impacted the Group’s net profit, but have resulted in changes to the
presentation of the Income Statement and the Balance Sheet of the affected segments. These changes have been applied
retrospectively.
The Group’s primary sources of revenue are interest and fee income (Retail Banking Services, Business Banking, Institutional Banking
and Markets, New Zealand) and funds management income (New Zealand).
Revenues and expenses occurring between segments are subject to transfer pricing arrangements. All intra-group transactions are
eliminated on consolidation.
Business segments are managed on the basis of net profit after income tax (“cash basis”). Management uses “cash basis” to assess
performance and it provides the basis for the determination of the Bank’s dividends. The “cash basis” presents the Group’s underlying
operating results, excluding a number of items that introduce volatility and/or one-off distortions of the Group’s current period
performance. These items, such as hedging and IFRS volatility, are calculated consistently year on year and do not discriminate
between positive and negative adjustments.
(i) Retail Banking Services
Retail Banking Services provides banking products and services to personal and private bank customers helping them to manage their
everyday banking needs, buy a home or invest for the future. Retail Banking Services also includes the financial results of retail banking
activities provided under the Bankwest and Unloan brands.
(ii) Business Banking
Business Banking serves the banking needs of business, corporate and agribusiness customers across the full range of financial
services solutions. It also provides equities trading and margin lending services through the CommSec business. Business Banking also
includes the financial results of business banking activities conducted under the Bankwest brand.
(iii) Institutional Banking and Markets
Institutional Banking and Markets provides a full range of domestic and global financing and banking services to large corporate,
institutional and government clients. These services include access to debt capital markets, risk management, transaction banking,
sustainable finance, structured capital solutions and working capital delivered through dedicated product and industry specialists, as
well as tailored research and data analytics.
(iv) New Zealand
New Zealand includes the banking and funds management businesses operating in New Zealand under the ASB brand. ASB provides a
range of banking, wealth and insurance products and services to its personal, business and rural customers in New Zealand.
(v) Corporate Centre and Other
Corporate Centre and Other include the results of the Group’s centrally held minority investments and subsidiaries, Group-wide
remediation costs, investment spend including enterprise-wide infrastructure and other strategic projects, employee entitlements, and
unallocated revenue and expenses relating to the Bank’s support functions including Treasury, Investor Relations, Group Strategy,
Legal and Corporate Affairs and Group-wide elimination entries arising on consolidation.
Centrally held minority investments and subsidiaries include the Group’s offshore minority investments in China (Bank of Hangzhou and
Qilu Bank) and Vietnam (Vietnam International Bank). They also include domestically held minority investments in Lendi Group Pty
Limited, Superannuation and Investments Hold Co Pty Limited as well as the strategic investments in x15ventures. On 1 May 2024, the
Group completed the sale of its 99% shareholding in PTBC to OCBC.
Treasury is primarily focused on the management of the Bank’s interest rate risk, funding and liquidity requirements, and management
of the Bank’s capital.
162
Notes to the Financial Statements
For the year ended 30 June 2024
163
CBA FINANCIAL REPORT
2024 Annual report
2.7
Financial reporting by segments (continued)
30 June 2024
Retail
Institutional
Corporate
Banking
Business
Banking and
New
Centre and
Services
Banking
Markets
Zealand
Other
Total
$M
$M
$M
$M
$M
$M
Net interest income
11,119
7,511
1,434
2,491
269
22,824
Other operating income:
Net commission income
1,292
391
196
223
14
2,116
Lending fees
233
332
228
28
–
821
Trading and other income
146
339
648
183
97
1,413
Total other operating income
1,671
1,062
1,072
434
111
4,350
Total operating income
12,790
8,573
2,506
2,925
380
27,174
Operating expenses
(4,802)
(2,743)
(1,088)
(1,203)
(2,382)
(12,218)
Loan impairment (expense)/benefit
(317)
(437)
4
(64)
12
(802)
Net profit/(loss) before tax
7,671
5,393
1,422
1,658
(1,990)
14,154
Corporate tax (expense)/benefit
(2,316)
(1,619)
(325)
(464)
406
(4,318)
Net profit/(loss) after tax from continuing
operations – "cash basis"
5,355
3,774
1,097
1,194
(1,584)
9,836
Net profit after tax from discontinued
operations
–
–
–
–
11
11
Net profit/(loss) after tax – "cash basis" ¹
5,355
3,774
1,097
1,194
(1,573)
9,847
Loss on acquisition, disposal, closure
and demerger of businesses
–
–
(37)
–
(433)
(470)
Hedging and IFRS volatility
–
–
–
151
(134)
17
Net profit/(loss) after tax – "statutory basis"
5,355
3,774
1,060
1,345
(2,140)
9,394
Additional information
Amortisation and depreciation
(225)
(106)
(46)
(151)
(912)
(1,440)
Balance Sheet
Total assets
524,897
244,738
188,299
116,496
179,646
1,254,076
Total liabilities
390,912
218,908
250,402
103,720
217,046
1,180,988
1 This balance excludes non-cash items, such as unrealised gains and losses relating to hedging and IFRS volatility, and gains and losses on previously announced
divestments including post-completion adjustments (such as purchase price adjustments, and finalisation of accounting adjustments for goodwill and foreign currency
translation reserve recycling), and transaction and separation costs.
163
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
164
2.7
Financial reporting by segments (continued)
30 June 2023 ¹
Retail
Institutional
Corporate
Banking
Business
Banking and
New
Centre and
Services
Banking
Markets
Zealand
Other
Total
$M
$M
$M
$M
$M
$M
Net interest income
11,697
7,248
1,443
2,617
51
23,056
Other operating income:
Net commission income
1,156
415
200
220
(11)
1,980
Lending fees
206
311
206
28
2
753
Trading and other income
70
303
575
176
222
1,346
Total other operating income
1,432
1,029
981
424
213
4,079
Total operating income
13,129
8,277
2,424
3,041
264
27,135
Operating expenses
(4,629)
(2,606)
(1,056)
(1,154)
(2,413)
(11,858)
Loan impairment (expense)/benefit
(587)
(492)
36
(59)
(6)
(1,108)
Net profit/(loss) before tax
7,913
5,179
1,404
1,828
(2,155)
14,169
Corporate tax (expense)/benefit
(2,371)
(1,555)
(356)
(508)
693
(4,097)
Net profit/(loss) after tax from continuing
operations – "cash basis"
5,542
3,624
1,048
1,320
(1,462)
10,072
Net profit after tax from discontinued
operations
–
–
–
–
18
18
Net profit/(loss) after tax – "cash basis" ²
5,542
3,624
1,048
1,320
(1,444)
10,090
Gain/(loss) on acquisition, disposal, closure
and demerger of businesses
181
–
–
–
(265)
(84)
Hedging and IFRS volatility
–
–
–
(204)
196
(8)
Net profit/(loss) after tax – "statutory basis"
5,723
3,624
1,048
1,116
(1,513)
9,998
Additional information
Amortisation and depreciation
(165)
(75)
(46)
(140)
(684)
(1,110)
Balance Sheet
Total assets
510,645
230,201
190,627
116,686
204,264
1,252,423
Total liabilities
369,297
217,236
244,781
104,575
244,901
1,180,790
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 This balance excludes non-cash items, such as unrealised gains and losses relating to hedging and IFRS volatility, and gains and losses on previously announced
divestments including post-completion adjustments (such as purchase price adjustments, and finalisation of accounting adjustments for goodwill and foreign currency
translation reserve recycling), and transaction and separation costs.
164
Notes to the Financial Statements
For the year ended 30 June 2024
165
CBA FINANCIAL REPORT
2024 Annual report
2.7
Financial reporting by segments (continued)
30 June 2022 ¹
Retail
Institutional
Corporate
Banking
Business
Banking and
New
Centre and
Services
Banking
Markets
Zealand
Other
Total
$M
$M
$M
$M
$M
$M
Net interest income
9,903
5,546
1,566
2,334
124
19,473
Other operating income:
Net commission income
1,062
588
177
218
33
2,078
Lending fees
204
286
209
37
–
736
Trading and other income
233
222
376
242
1,239
2,312
Total other operating income
1,499
1,096
762
497
1,272
5,126
Total operating income
11,402
6,642
2,328
2,831
1,396
24,599
Operating expenses
(4,422)
(2,609)
(995)
(1,042)
(2,360)
(11,428)
Loan impairment benefit/(expense)
409
(114)
111
(37)
(12)
357
Net profit/(loss) before tax
7,389
3,919
1,444
1,752
(976)
13,528
Corporate tax (expense)/benefit
(2,195)
(1,185)
(376)
(487)
229
(4,014)
Net profit/(loss) after tax from continuing
operations – "cash basis"
5,194
2,734
1,068
1,265
(747)
9,514
Net profit after tax from discontinued
operations
–
–
–
–
113
113
Net profit/(loss) after tax – "cash basis" ²
5,194
2,734
1,068
1,265
(634)
9,627
(Loss)/gain on acquisition, disposal, closure
and demerger of businesses
(130)
20
–
–
1,065
955
Hedging and IFRS volatility
–
–
–
(536)
644
108
Net profit after tax – "statutory basis"
5,064
2,754
1,068
729
1,075
10,690
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 This balance excludes non-cash items, such as unrealised gains and losses relating to hedging and IFRS volatility, and gains and losses on previously announced
divestments including post-completion adjustments (such as purchase price adjustments, and finalisation of accounting adjustments for goodwill and foreign currency
translation reserve recycling), and transaction and separation costs.
165
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
166
2.7
Financial reporting by segments (continued)
Group ¹ ²
Geographical Information
30 Jun 24
30 Jun 23
30 Jun 22
Financial performance and position
$M
%
$M
%
$M
%
Income
Australia
22,225
82.6
23,035
84.0
21,031
84.7
New Zealand
3,402
12.6
3,367
12.3
2,969
11.9
Other locations ³
1,294
4.8
1,026
3.7
846
3.4
Total income
26,921
100.0
27,428
100.0
24,846
100.0
Non-current assets ⁴
Australia
12,075
93.3
12,717
89.7
12,653
92.8
New Zealand
752
5.8
776
5.5
753
5.5
Other locations ³
120
0.9
677
4.8
224
1.7
Total non-current assets
12,947
100.0
14,170
100.0
13,630
100.0
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 Information is presented on a continuing operations basis.
3 Other locations include: United Kingdom, the Netherlands, United States, Japan, Singapore, Hong Kong, Indonesia, China and India.
4 Non-current assets include property, plant and equipment, investments in associates and joint ventures, and intangibles.
The geographic segment represents the location in which the transaction was recognised.
ACCOUNTING POLICIES
Operating segments are reported based on the Group’s organisational and management structure. Senior management review the
Group’s internal reporting based on these segments, in order to assess performance and allocate resources.
All transactions between segments are conducted on an arm’s length basis, with inter-segment revenue and costs eliminated in the
‘Corporate Centre and Other’ segment.
166
Notes to the Financial Statements
For the year ended 30 June 2024
167
CBA FINANCIAL REPORT
2024 Annual report
3
Our lending activities
OVERVIEW
Lending is the Group’s primary business activity, generating most of its net interest income and lending fees. The Group satisfies
customers’ needs for borrowed funds by providing a broad range of lending products in Australia, New Zealand and other jurisdictions.
As a result of its lending activities, the Group assumes credit risk arising from the potential that it will not receive the full amount owed.
This section provides details of the Group’s lending portfolio by type of product and geographic region, analysis of the credit quality of
the Group’s lending portfolio and the related impairment provisions.
3.1
Loans and other receivables
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
Note
$M
$M
$M
$M
Australia
Overdrafts
15,570
26,218
15,570
26,218
Home loans ¹ ²
596,346
583,827
589,614
576,057
Credit card outstandings
8,559
9,052
8,559
9,052
Lease financing
4,324
3,451
4,129
3,266
Term loans and other lending
207,535
193,446
207,453
193,389
Total Australia
832,334
815,994
825,325
807,982
Overseas
Overdrafts
884
1,044
160
135
Home loans ¹ ²
68,355
68,391
82
130
Credit card outstandings
866
880
–
–
Term loans and other lending
47,509
46,942
15,574
14,442
Total Overseas
117,614
117,257
15,816
14,707
Gross loans and other receivables
949,948
933,251
841,141
822,689
Less:
Provisions for loan impairment:
3.2
Collective provisions
(5,200)
(5,037)
(4,700)
(4,519)
Individually assessed provisions
(712)
(754)
(621)
(677)
Unearned income:
Terms loans
(1,363)
(1,089)
(1,363)
(1,088)
Lease financing
(463)
(289)
(433)
(265)
(7,738)
(7,169)
(7,117)
(6,549)
Net loans and other receivables
942,210
926,082
834,024
816,140
1 Home loans balance includes residential mortgages that have been assigned to securitisation vehicles and covered bond trusts. Further details on these residential
mortgages are disclosed in Note 4.5.
2 These balances are presented gross of mortgage offset balances as required under accounting standards.
Based on behavioural terms and current market conditions, the amounts expected to be repaid within 12 months of the balance sheet
date are $220,847 million (30 June 2023: $217,835 million) for the Group, and $200,686 million (30 June 2023: $198,545 million) for the
Bank.
167
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
168
3.1
Loans and other receivables (continued)
ACCOUNTING POLICIES
Loans and other receivables include overdrafts, home loans, credit cards, other personal lending and term loans. These financial assets
are held within a business model with an objective to hold financial assets in order to collect contractual cash flows. The contractual
cash flows on these financial assets comprise the payment of principal and interest only. These instruments are measured at amortised
cost.
Loans and other receivables, consistent with the Group’s policy for all financial assets measured at amortised cost, are recognised on
settlement date, when funding is advanced to the borrowers. They are initially recognised at their fair value plus directly attributable
transaction costs such as broker fees and commissions. Subsequent to initial recognition, they are measured at amortised cost using
the effective interest method and are presented net of provisions for impairment. The accounting policy for provisions for impairment is
provided in Note 3.2. For information on the Group’s management of credit risk, refer to Note 9.2.
Finance leases, where the Group acts as lessor, are also included in Loans and other receivables. Finance leases are those where
substantially all the risks and rewards of the lease asset have been transferred to the lessee. Lease receivables are recognised at an
amount equal to the net investment in the lease. Finance lease income reflects a constant periodic return on this net investment and is
recognised within other interest income in the Income Statement.
Critical accounting judgements and estimates
When applying the effective interest method the Group has estimated the behavioural term of each loan portfolio by reference to
historical prepayment rates and contractual maturities.
168
Notes to the Financial Statements
For the year ended 30 June 2024
169
CBA FINANCIAL REPORT
2024 Annual report
3.1
Loans and other receivables (continued)
Contractual maturity tables
Group
Maturity Period at 30 June 2024
Maturing
1 year or less
Maturing
between 1
and 5 years
Maturing
between 5
and 15 years
Maturing
after
15 years
Total
Industry/sector
$M
$M
$M
$M
$M
Australia
Sovereign
10,342
687
488
250
11,767
Agriculture
5,494
12,744
161
47
18,446
Bank and other financial
16,876
3,106
138
49
20,169
Construction
1,872
4,235
335
139
6,581
Consumer
18,338
57,920
180,802
352,856
609,916
Other commercial and industrial
53,598
103,666
6,110
2,081
165,455
Total Australia
106,520
182,358
188,034
355,422
832,334
Overseas
Sovereign
176
–
–
–
176
Agriculture
5,221
4,110
561
246
10,138
Bank and other financial
4,523
2,986
12
10
7,531
Construction
214
277
114
193
798
Consumer
5,023
7,247
21,876
36,584
70,730
Other commercial and industrial
16,233
7,473
2,819
1,716
28,241
Total Overseas
31,390
22,093
25,382
38,749
117,614
Gross loans and other receivables
137,910
204,451
213,416
394,171
949,948
Maturing 1
year or less
Maturing
between 1
and 5 years
Maturing
between 5
and 15 years
Maturing
after
15 years
Total
Interest rate
$M
$M
$M
$M
$M
Australia
87,058
163,835
162,529
310,278
723,700
Overseas
27,647
14,255
4,076
3,694
49,672
Total variable interest rates
114,705
178,090
166,605
313,972
773,372
Australia
19,462
18,523
25,505
45,144
108,634
Overseas
3,743
7,838
21,306
35,055
67,942
Total fixed interest rates ¹
23,205
26,361
46,811
80,199
176,576
Gross loans and other receivables
137,910
204,451
213,416
394,171
949,948
1 For fixed interest rate loans, the information is presented on the basis of contractual maturity rather than the expiry of the fixed rate period.
169
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
170
3.1
Loans and other receivables (continued)
Group
Maturity Period at 30 June 2023
Maturing 1
year or less
Maturing
between 1
and 5 years
Maturing
between 5
and 15 years
Maturing
after
15 years
Total
Industry/sector
$M
$M
$M
$M
$M
Australia
Sovereign
23,149
644
466
277
24,536
Agriculture
4,297
11,378
255
33
15,963
Bank and other financial
16,055
4,539
56
48
20,698
Construction
1,523
4,141
349
140
6,153
Consumer
20,681
58,499
177,525
340,127
596,832
Other commercial and industrial
42,123
101,179
6,609
1,901
151,812
Total Australia
107,828
180,380
185,260
342,526
815,994
Overseas
Sovereign
501
–
–
–
501
Agriculture
5,129
4,220
614
223
10,186
Bank and other financial
5,176
2,181
13
13
7,383
Construction
224
289
96
196
805
Consumer
5,281
7,486
21,106
37,001
70,874
Other commercial and industrial
16,727
6,733
2,536
1,512
27,508
Total Overseas
33,038
20,909
24,365
38,945
117,257
Gross loans and other receivables
140,866
201,289
209,625
381,471
933,251
Maturing 1
year or less
Maturing
between 1
and 5 years
Maturing
between 5
and 15 years
Maturing
after
15 years
Total
Interest rate
$M
$M
$M
$M
$M
Australia
94,718
156,023
137,429
247,684
635,854
Overseas
29,432
13,515
3,880
3,195
50,022
Total variable interest rates
124,150
169,538
141,309
250,879
685,876
Australia
13,110
24,357
47,831
94,842
180,140
Overseas
3,606
7,394
20,485
35,750
67,235
Total fixed interest rates ¹
16,716
31,751
68,316
130,592
247,375
Gross loans and other receivables
140,866
201,289
209,625
381,471
933,251
1 For fixed interest rate loans, the information is presented on the basis of contractual maturity rather than the expiry of the fixed rate period.
170
Notes to the Financial Statements
For the year ended 30 June 2024
171
CBA FINANCIAL REPORT
2024 Annual report
3.2
Loan impairment expense and provisions for impairment
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 24
30 Jun 23
$M
$M
$M
$M
$M
Loan impairment expense
Net collective provision funding
559
795
(506)
513
733
Net new and increased individual provisioning
397
470
321
324
418
Write-back of individually assessed provisions
(154)
(157)
(172)
(122)
(130)
Total loan impairment expense/(benefit) ¹
802
1,108
(357)
715
1,021
1 The year ended 30 June 2024 includes a benefit of $30 million and $18 million for the Group and the Bank, respectively, in relation to credit exposures reclassified to
assets held for sale.
Movement in provisions for impairment and credit exposures by ECL stage
The tables below provide movements in the Group’s and the Bank’s impairment provisions and credit exposures by expected credit loss
(ECL) stage for the years ended 30 June 2024 and 2023.
Movements in credit exposures and provisions for impairment in the tables below represent the sum of monthly movements over the
year and are attributable to the following items:
• Transfers to/(from): movements due to transfers of credit exposures between Stage 1, Stage 2 and Stage 3. Excludes the impact of
re-measurements of provisions for impairment between 12 months and lifetime ECL;
• Net re-measurement on transfers between stages: movements in provisions for impairment due to re-measurement between
12 months and lifetime ECL as a result of transfers of credit exposures between stages;
• Net financial assets originated: net movements in credit exposures and provisions for impairment due to new financial assets
originated as well as changes in existing credit exposures due to maturities, repayments or credit limit changes;
• Movements in existing IAP (including IAP write-backs): net movements in existing Individually Assessed Provisions (IAP)
excluding write-offs;
• Movement due to risk parameters and other changes: movements in provisions for impairment due to changes in credit risk
parameters, forward looking economic scenarios or other assumptions as well as other changes in underlying credit quality that do not
lead to transfers between Stage 1, Stage 2 and Stage 3;
• Write-offs: derecognition of credit exposures and provisions for impairment upon write-offs;
• Recoveries: increases in provisions for impairment due to recoveries of loans previously written off; and
• Foreign exchange and other movements: other movements in credit exposures and provisions for impairment including the impact
of changes in foreign exchange rates.
171
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
172
3.2
Loan impairment expense and provisions for impairment (continued)
Group
Stage 1
Stage 2 ¹
Stage 3
Performing
Performing
Non-performing
Total
Gross
exposure
Provisions
Gross
exposure
Provisions
Gross
exposure
Provisions
Gross
exposure Provisions ²
$M
$M
$M
$M
$M
$M
$M
$M
Opening balance as at
1 July 2022
914,883
1,313
141,817
2,538
7,462
1,496
1,064,162
5,347
Transfers to/(from)
Stage 1
124,546
1,920
(124,340)
(1,904)
(206)
(16)
–
–
Stage 2
(211,946)
(815)
214,905
1,053
(2,959)
(238)
–
–
Stage 3
(1,336)
(21)
(5,124)
(386)
6,460
407
–
–
Net re-measurement on
transfers between stages
–
(1,454)
–
2,379
–
360
–
1,285
Net financial assets originated
88,153
384
(40,188)
(815)
(2,325)
(232)
45,640
(663)
Movement in existing IAP
(including IAP write-backs)
–
–
–
–
–
218
–
218
Movements due to risk
parameters and other changes
–
372
–
4
–
(108)
–
268
Loan impairment expense
for the period
386
331
391
1,108
Write-offs
–
–
–
–
(684)
(684)
(684)
(684)
Recoveries
–
–
–
–
–
108
–
108
Foreign exchange and
other commitments
7,265
10
804
20
29
41
8,098
71
Closing balance as at
30 June 2023
921,565
1,709
187,874
2,889
7,777
1,352
1,117,216
5,950
Transfers to/(from)
Stage 1
112,438
1,476
(112,360)
(1,469)
(78)
(7)
–
–
Stage 2
(162,673)
(736)
165,860
962
(3,187)
(226)
–
–
Stage 3
(1,617)
(47)
(7,374)
(392)
8,991
439
–
–
Net re-measurement on
transfers between stages
–
(1,073)
–
1,667
–
525
–
1,119
Net financial assets originated
73,179
343
(42,516)
(852)
(3,088)
(319)
27,575
(828)
Movement in existing IAP
(including IAP write-backs)
–
–
–
–
–
174
–
174
Movements due to risk
parameters and other changes
–
123
–
(4)
–
248
–
367
Loan impairment expense
for the period ³
86
(88)
834
832
Write-offs ³
–
–
–
–
(764)
(764)
(764)
(764)
Recoveries
–
–
–
–
–
128
–
128
Foreign exchange and
other commitments
(951)
9
29
14
(11)
47
(933)
70
Reclassified to assets
held for sale
(791)
(9)
(53)
(21)
(63)
(51)
(907)
(81)
Closing balance as at
30 June 2024
941,150
1,795
191,460
2,794
9,577
1,546
1,142,187
6,135
1 The assessment of significant increase in credit risk includes the impact of forward looking multiple economic scenarios in addition to adjustments for emerging risks
at an industry, geographic location or a particular portfolio segment level, which are calculated by stressing an exposure’s internal credit rating grade at the reporting
date. This accounts for approximately 64% of Stage 2 credit exposures for the Group as at 30 June 2024 (30 June 2023: 62%).
2 As at 30 June 2024, total provisions include $223 million in relation to financial guarantees and other off balance sheet instruments (30 June 2023: $159 million).
3 Loan impairment expense for the year ended 30 June 2024 excludes a $30 million benefit recognised by the Group in relation to credit exposures reclassified to
assets held for sale. Write-offs for the year ended 30 June 2024 exclude $43 million recognised by the Group in relation to credit exposures reclassified to assets
held for sale.
172
Notes to the Financial Statements
For the year ended 30 June 2024
173
CBA FINANCIAL REPORT
2024 Annual report
3.2
Loan impairment expense and provisions for impairment (continued)
Bank
Stage 1
Stage 2 ¹
Stage 3
Performing
Performing
Non-performing
Total
Gross
exposure
Provisions
Gross
exposure
Provisions
Gross
exposure
Provisions
Gross
exposure Provisions ²
$M
$M
$M
$M
$M
$M
$M
$M
Opening balance as at
1 July 2022
814,832
1,157
123,585
2,269
6,326
1,369
944,743
4,795
Transfers to/(from)
Stage 1
119,052
1,860
(118,857)
(1,845)
(195)
(15)
–
–
Stage 2
(199,960)
(766)
202,326
952
(2,366)
(186)
–
–
Stage 3
(558)
(18)
(4,431)
(347)
4,989
365
–
–
Net re-measurement on
transfers between stages
–
(1,419)
–
2,353
–
257
–
1,191
Net financial assets originated
84,070
364
(39,221)
(799)
(2,048)
(201)
42,801
(636)
Movement in existing IAP
(including IAP write-backs)
–
–
–
–
–
212
–
212
Movements due to risk
parameters and other changes
–
352
–
43
–
(141)
–
254
Loan impairment expense
for the period
373
357
291
1,021
Write-offs
–
–
–
–
(634)
(634)
(634)
(634)
Recoveries
–
–
–
–
–
95
–
95
Foreign exchange and
other commitments
5,420
10
647
19
1
44
6,068
73
Closing balance as at
30 June 2023
822,856
1,540
164,049
2,645
6,073
1,165
992,978
5,350
Transfers to/(from)
Stage 1
105,222
1,420
(105,158)
(1,415)
(64)
(5)
–
–
Stage 2
(151,459)
(695)
153,858
852
(2,399)
(157)
–
–
Stage 3
(1,391)
(45)
(6,078)
(356)
7,469
401
–
–
Net re-measurement on
transfers between stages
–
(1,040)
–
1,647
–
399
–
1,006
Net financial assets originated
71,269
327
(41,158)
(832)
(2,595)
(271)
27,516
(776)
Movement in existing IAP
(including IAP write-backs)
–
–
–
–
–
153
–
153
Movements due to risk
parameters and other changes
–
146
–
(11)
–
215
–
350
Loan impairment expense
for the period ³
113
(115)
735
733
Write-offs ³
–
–
–
–
(703)
(703)
(703)
(703)
Recoveries
–
–
–
–
–
119
–
119
Foreign exchange and
other commitments
(463)
10
176
16
–
41
(287)
67
Reclassified to assets
held for sale
–
–
–
–
(42)
(42)
(42)
(42)
Closing balance as at
30 June 2024
846,034
1,663
165,689
2,546
7,739
1,315
1,019,462
5,524
1 The assessment of significant increase in credit risk includes the impact of forward looking multiple economic scenarios in addition to adjustments for emerging risks
at an industry, geographic location or a particular portfolio segment level, which are calculated by stressing an exposure’s internal credit rating grade at the reporting
date. This accounts for approximately 64% of Stage 2 credit exposures for the Bank as at 30 June 2024 (30 June 2023: 62%).
2 As at 30 June 2024, total provisions include $203 million in relation to financial guarantees and other off balance sheet instruments (30 June 2023: $154 million).
3 Loan impairment expense for the year ended 30 June 2024 excludes a $18 million benefit recognised by the Bank in relation to credit exposures reclassified to
assets held for sale. Write-offs for the year ended 30 June 2024 exclude $41 million recognised by the Bank in relation to credit exposures reclassified to assets held
for sale.
173
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
174
3.2
Loan impairment expense and provisions for impairment (continued)
Write-offs
Group
30 Jun 24
30 Jun 23
Write-offs net of recoveries to average loans and other receivables
%
%
Home loans
0.01
0.00
Other consumer
2.08
1.40
Non-retail
0.11
0.12
Total
0.07
0.06
Of the total $764 million of loans written-off by the Group during the year ended 30 June 2024 (30 June 2023: $684 million), $315 million
remain subject to enforcement activity (30 June 2023: $355 million). Of the total $703 million loans written-off by the Bank during the
year ended 30 June 2024 (30 June 2023: $634 million), $264 million remain subject to enforcement activity (30 June 2023:
$331 million).
ACCOUNTING POLICIES
By providing loans to customers, the Group bears the risk that the future circumstances of customers might change, including their
ability to repay their loans in part or in full. While the Group’s credit and responsible lending policies aim to minimise this risk, there will
always be instances where the Group will not receive the full amount owed and hence a provision for impaired loans will be necessary.
A description of the key components of the Group’s impairment methodology is provided below.
Expected credit loss (ECL) model
The ECL model applies to all financial assets measured at amortised cost, debt securities measured at fair value through other
comprehensive income, finance lease receivables, loan commitments and financial guarantee contracts not measured at fair value
through profit or loss (FVTPL). The model uses a three-stage approach to recognition of expected credit losses. Financial assets
migrate through these stages based on changes in credit risk since origination:
• Stage 1 – 12 months ECL – Performing loans
On origination, an impairment provision equivalent to 12 months ECL is recognised. 12 months ECL includes credit losses expected
to arise from defaults occurring over the next 12 months.
• Stage 2 – Lifetime ECL – Performing loans that have experienced a significant increase in credit risk (SICR)
Financial assets that have experienced a SICR since origination are transferred to Stage 2 and an impairment provision equivalent to
lifetime ECL is recognised. Lifetime ECL includes credit losses expected to arise from defaults occurring over the remaining life of
financial assets. If credit quality improves in a subsequent period such that the increase in credit risk since origination is no longer
considered significant the exposure is reclassified to Stage 1 and the impairment provision reverts to 12 months ECL.
• Stage 3 – Lifetime ECL – Non-performing loans
Financial assets in default and assets restructured due to the borrower’s financial difficulty or hardship are transferred to Stage 3 and
an impairment provision equivalent to lifetime ECL is recognised.
Credit losses for financial assets in Stage 1 and Stage 2 are assessed for impairment collectively, whilst those in Stage 3 are subjected
to either collective or individual assessment of ECL.
Significant increase in credit risk (SICR)
SICR is assessed by comparing the risk of default occurring over the expected life of the financial asset at reporting date to the
corresponding risk of default at origination. The Group considers all available qualitative and quantitative information that is relevant to
assessing SICR.
For non-retail portfolios, such as the corporate risk rated portfolio and the asset finance portfolio, the risk of default is defined using the
existing Risk Rated Probability of Default (PD) Masterscale. The PD Masterscale is used in internal credit risk management and
includes 24 risk grades that are assigned at a customer level using rating tools reflecting customer specific financial and non-financial
information and management’s experienced credit judgement. Internal credit risk ratings are updated regularly on the basis of the most
recent financial and non-financial information.
The Group uses a Retail Masterscale in the ECL measurement on personal loans, credit cards and home loans. The Retail Masterscale
has 16 risk grades that are assigned to retail accounts based on their credit quality scores determined through a credit quality
scorecard. SME retail portfolios use a similar approach and are mapped to SME Retail pools. Exposures are mapped to risk grades and
pools monthly based on new behavioural information that is used as input to credit quality scorecards.
174
Notes to the Financial Statements
For the year ended 30 June 2024
175
CBA FINANCIAL REPORT
2024 Annual report
3.2
Loan impairment expense and provisions for impairment (continued)
For significant portfolios, the primary indicator of SICR is a significant deterioration in an exposure’s internal credit rating grade between
origination and reporting date. Application of the primary SICR indicator uses a sliding threshold such that an exposure with a higher
credit quality at origination would need to experience a more significant downgrade compared to a lower credit quality exposure before
SICR is triggered. The level of downgrade required to trigger SICR for each origination grade has been defined for each significant
portfolio.
The assessment of significant increase in credit risk includes the impact of forward looking multiple economic scenarios in addition to
adjustments for emerging risks at an industry, geographic location or a particular portfolio segment level, which are calculated by
stressing an exposure’s internal risk grade at the reporting date. This accounts for approximately 64% of Stage 2 exposures for the
Group and 64% for the Bank as at 30 June 2024 (30 June 2023: 62% for the Group and 62% for the Bank).
The Group also uses secondary SICR indicators as backstops in combination with the primary SICR indicator, including:
• arrears status that incorporates a rebuttable presumption of 30 days past due;
• a retail exposure entering a financial hardship status; and
• a non-retail exposure’s referral to Group Credit Structuring.
For a number of small portfolios, which are not considered significant individually or in combination, the Group applies simplified
provisioning approaches that differ from the description above. 30 days past due is used as a primary indicator of SICR on exposures in
these portfolios.
Definition of default, non-performing assets and write-offs
The definition of default used in measuring ECL is aligned to the definition used for internal credit risk management purposes across all
portfolios. Default occurs when there are indicators that a borrower is unlikely to meet contractual credit obligations to the Group in full,
or the exposure is 90 days past due. Non-performing credit exposures include exposures that are in default and exposures that have
been restructured on non-commercial terms due to the borrower’s financial difficulty or hardship.
Loans are written off when there is no reasonable expectation of recovery. Unsecured retail loans are generally written off when
repayments become 180 days past due. Secured loans are generally written off when assets pledged to the Group have been realised
and there are no further prospects of additional recovery.
ECL measurement
ECL is an unbiased and probability-weighted expected credit loss estimated by evaluating a range of possible outcomes and taking into
account the time value of money, past events, current conditions and forecasts of future economic conditions.
The Group uses the following collective provisioning models in calculating ECL for significant portfolios:
• Retail lending: Personal Loans model, Credit Cards model, Home Loans model; and
• Non-retail lending: Corporate Risk Rated model, Asset Finance model, Retail SME model.
For each significant portfolio ECL is calculated as a product of the following credit risk factors at a facility level:
• Probability of default (PD): The likelihood that a borrower will be unable to pay its obligations in full without having to take actions
such as realising security or that the borrower will become 90 days overdue on an obligation or contractual commitment;
• Exposure at default (EAD): The expected Balance Sheet exposure at default. The Group generally calculates EAD as the higher of
the drawn balance and total credit limit, except for the credit cards portfolio, for which the EAD calculation also takes into account the
probability of unused limits being drawn down; and
• Loss given default (LGD): The amount that is not expected to be recovered following default.
Secured retail exposures and defaulted non-retail exposures are generally assessed for impairment through an Individually Assessed
Provisions (IAP) process if expected losses are in excess of $20,000. Impairment provisions on these exposures are calculated directly
as the difference between the defaulted asset’s carrying value and the present value of expected future cash flows including cash flows
from realisation of collateral, where applicable.
Lifetime of an exposure
For exposures in Stage 2 and Stage 3 impairment provisions are determined as a lifetime expected loss. The Group uses a range of
approaches to estimate expected lives of financial instruments subject to ECL requirements:
• Non-revolving products in corporate portfolios: Expected life is determined as a maximum contractual period over which the
Group is exposed to credit risk;
• Non-revolving retail products: For fixed term products such as personal loans and home loans, expected life is determined using
behavioural term analysis and does not exceed the maximum contractual period; and
• Revolving products in corporate and retail portfolios: For revolving products that include both a loan and an undrawn
commitment, such as credit cards and corporate lines of credit, the Group’s contractual ability to cancel the undrawn limits and
demand repayments does not limit the exposure to credit losses to the contractual notice period. For such products, ECL is measured
over the behavioural life.
175
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
176
3.2
Loan impairment expense and provisions for impairment (continued)
Forward-looking information
Credit risk factors of PD and LGD used in the ECL calculation are point-in-time estimates based on current conditions and adjusted to
include the impact of multiple probability-weighted future forecast economic scenarios.
Forward looking PD and LGD factors are modelled for each significant portfolio based on macroeconomic factors that are most closely
correlated with credit losses in the relevant portfolios. Each of the four scenarios (refer below) includes a forecast of relevant
macroeconomic variables which differ by portfolio:
• Retail portfolios: Interest rates, unemployment rate and house price index; and
• Non-retail lending: Unemployment rate, GDP, business investment, disposable income, foreign exchange rates and Trade Weighted
Index (TWI).
New Zealand equivalents of a subset of the above macroeconomic variables are used for retail credit exposures originated in
New Zealand.
The Group uses the following four alternative macroeconomic scenarios to reflect an unbiased probability-weighted range of possible
future outcomes in estimating ECL for significant portfolios:
• Central scenario: This scenario is based on the Group’s internal economic forecasts and market consensus as well as other
assumptions used in business planning and forecasting;
• Downside scenario: This scenario contemplates the potential impact of possible, but less likely, adverse macroeconomic conditions,
resulting from persistent inflationary pressures which leads to disorderly asset price declines, a sharp increase in credit spreads,
corporate defaults and high unemployment. The scenario also reflects the potential macroeconomic impacts of climate risk from a
severe drought in Australia, through a decline in house prices, higher unemployment as well as weaker growth;
• Upside scenario: This scenario is included to account for the potential impact of remote, more favourable macroeconomic conditions.
Relative to the Central scenario, the Upside scenario features stronger growth in economic output, further improvement in labour
market conditions, lower interest rates and a stronger housing market; and
• Severe downside scenario: This scenario contemplates the potentially severe impact of remote, extremely adverse macroeconomic
conditions. Relative to the Downside scenario, this scenario features a sharper contraction with a slower recovery in economic output,
heightened and prolonged weakness in the labour market, and more severe declines in house prices, while interest rates are reduced
to accommodative levels.
The table below provides a summary of key macroeconomic variables used in the Central and Downside scenarios as at 30 June 2024.
Central
Downside
Financial Year
Financial Year
2025
2026
2025
2026
GDP (annual % change)
2.1
2.4
(7.1)
(3.5)
Unemployment rate (%) ¹
4.6
4.5
8.5
8.9
Cash rate (%) ¹
3.60
3.25
5.75
3.00
House prices (annual % change)
5.4
3.5
(24.7)
0.7
CPI (annual % change) ²
2.9
2.5
7.8
3.1
AUD/USD exchange rate ¹
0.65
0.65
0.52
0.52
Trade Weighted Index (TWI) ¹
62
62
52
52
NZ unemployment rate (%) ¹
5.5
5.0
8.0
8.5
NZ cash rate (%) ¹
4.75
3.00
7.50
5.00
NZ house prices (annual % change)
6.9
12.1
(15.0)
–
1 Spot rate/index at 30 June.
2 CPI is not a variable used in ECL models, however, it is considered by the Group in deriving forecast macroeconomic variables used in ECL models.
176
Notes to the Financial Statements
For the year ended 30 June 2024
177
CBA FINANCIAL REPORT
2024 Annual report
3.2
Loan impairment expense and provisions for impairment (continued)
The requirement to probability-weight possible future outcomes captures the uncertainty inherent in the credit outlook, and changes in
that uncertainty over time. Weights are assigned to each scenario based on management’s best estimate of the proportion of potential
future loss outcomes that each scenario represents. The same economic scenarios and probability weights apply across all portfolios.
The following probability weights applied at 30 June 2024 and 2023:
Combined weighting
Scenario
30 Jun 24
30 Jun 23
Central and Upside
57.5%
57.5%
Downside and Severe downside
42.5%
42.5%
During the year ended 30 June 2024, macroeconomic scenarios were revised reflecting current weaker economic conditions. The
changes to the Central scenario included an improved outlook for growth and house prices, in addition to lower interest rates and
slightly higher unemployment. The Downside scenario was updated for higher interest rates and weaker growth. The Group also
increased the weighting to the Severe Downside scenario with a commensurate decrease in the Downside scenario to account for
increased risks associated with geopolitical tensions, whilst the weighting of the Central and Upside scenarios remained unchanged.
The Group’s assessment of SICR also incorporates the impact of multiple probability-weighted future forecast economic scenarios on
exposures’ internal risk grades using the same four forecast macroeconomic scenarios as described above.
In estimating impairment provisions on individually significant defaulted exposures, the Group generally applies prudent assumptions in
estimating recovery cash flows. Incorporating multiple forecast economic scenarios in estimates is not expected to significantly affect
the level of impairment provisions on these credit exposures.
Incorporation of experienced credit judgement
Management exercises credit judgement in assessing if an exposure has experienced SICR and in determining the amount of
impairment provisions at each reporting date. Where applicable, credit risk factors (PD and LGD) are adjusted to incorporate reasonable
forward looking information about known or expected risks for specific segments of portfolios that would otherwise not have been
considered in the modelling process. Credit judgement is used to determine the degree of adjustment to be applied and considers
information such as emerging risks at an industry, geographic and portfolio segment level.
The Group also applies overlays which are determined based on a range of techniques including stress testing, benchmarking, scenario
analysis and expert judgement. Overlays are subject to internal governance and applied as an incremental ECL top-up amount to the
impacted portfolio segments.
As at 30 June 2024, the Group and the Bank held overlays of $558 million (30 June 2023: $525 million) for emerging risks, including the
potential impact on customers more susceptible to ongoing cost of living pressures and high interest rates. The overlays included
$558 million (30 June 2023: $500 million) in relation to the Group’s retail lending portfolio and nil (30 June 2023: $25 million) in relation
to the non-retail portfolio.
The Group also applies additional overlays and forward-looking adjustments for other factors that cannot be adequately accounted for
through the ECL models.
Sensitivity of provisions for impairment to changes in forward looking assumptions
As described above, the Group applies four alternative macroeconomic scenarios (Central, Upside, Downside and Severe downside
scenarios) to reflect an unbiased probability-weighted range of possible future outcomes in estimating ECL.
The table below provides approximate levels of provisions for impairment under the Central and Downside scenarios for the Group and
the Bank assuming 100% weighting was applied to each scenario and holding all other assumptions constant. As noted above, these
scenarios and their associated weights have been selected based on the expected range of potential future loss outcomes.
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Reported probability weighted ECL
6,135
5,950
5,524
5,350
100% Central scenario total
3,956
3,832
3,588
3,232
100% Downside scenario total
7,883
7,893
7,179
7,293
Sensitivity of provisions for impairment to SICR assessment criteria
If 1% of Stage 1 credit exposures as at 30 June 2024 was included in Stage 2, provisions for impairment would increase by
approximately $119 million for the Group and $113 million for the Bank (30 June 2023: $125 million for the Group and $117 million for
the Bank).
If 1% of Stage 2 credit exposures as at 30 June 2024 was included in Stage 1, provisions for impairment would decrease by
approximately $24 million for the Group and $22 million for the Bank (30 June 2023: $25 million for the Group and $23 million for the
Bank).
177
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
178
4
Our deposits and funding activities
OVERVIEW
Stable and well diversified funding sources are critical to the Group’s ability to fund its lending and investing activities, and support its
business growth.
Our main sources of funding include customer deposits, term funds raised in domestic and offshore wholesale markets via issuing debt
securities and loan capital, and term funding from central banks. The Group also relies on repurchase agreements as a source of short
term wholesale funding. Refer to Note 9.4 for the Group’s management of liquidity and funding risk.
4.1
Deposits and other public borrowings
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Australia
Certificates of deposit
30,178
28,870
30,178
28,870
Term deposits
171,203
171,348
171,203
171,348
On-demand and short-term deposits
476,188
457,127
476,188
457,127
Deposits not bearing interest
101,891
110,045
101,857
110,019
Securities sold under agreements to repurchase
241
36
241
36
Total Australia
779,701
767,426
779,667
767,400
Overseas
Certificates of deposit
15,239
15,914
12,908
12,517
Term deposits
44,569
39,748
6,281
5,137
On-demand and short-term deposits
31,030
31,777
562
718
Deposits not bearing interest
8,844
9,656
31
21
Securities sold under agreements to repurchase
3,539
474
3,433
474
Total Overseas
103,221
97,569
23,215
18,867
Total deposits and other public borrowings
882,922
864,995
802,882
786,267
The majority of the amounts are due to be settled within 12 months of the balance sheet date.
Uninsured deposits
Uninsured deposits refer to accounts or products that are deemed ineligible for compensation, or balances in excess of the threshold for
compensation, under the deposit guarantee schemes for the country in which the deposits are held. For the Group, this primarily relates
to deposit balances in excess of the threshold for compensation or deemed ineligible under the Australian Government’s Financial
Claim Scheme. As at 30 June 2024, $538,643 million of the Group’s deposit balances were ineligible for government based deposit
insurance schemes in their relevant country of jurisdiction (30 June 2023: $526,450 million).
178
Notes to the Financial Statements
For the year ended 30 June 2024
179
CBA FINANCIAL REPORT
2024 Annual report
4.1
Deposits and other public borrowings (continued)
The contractual maturity of uninsured certificates of deposit and term deposits as at 30 June 2024 is presented below:
Group
At 30 June 2024
Maturing
3 months or
less
Maturing
between 3
and 6 months
Maturing
between 6
and 12
months
Maturing
after 12
months
Total
$M
$M
$M
$M
$M
Australia
Certificates of deposit
9,724
16,565
3,889
–
30,178
Term deposits
52,370
30,156
30,049
3,821
116,396
Total Australia
62,094
46,721
33,938
3,821
146,574
Overseas
Certificates of deposit
5,236
4,151
5,838
14
15,239
Term deposits
19,055
12,050
10,138
3,324
44,567
Total Overseas
24,291
16,201
15,976
3,338
59,806
Total uninsured certificates of deposits and term
deposits
86,385
62,922
49,914
7,159
206,380
ACCOUNTING POLICIES
Deposits from customers include certificates of deposit, term deposits, savings deposits and other demand deposits. Deposits are
initially recognised at their fair value less directly attributable transaction costs. Subsequent to initial recognition, they are measured at
amortised cost. Interest incurred is recognised within net interest income using the effective interest method.
Securities sold under repurchase agreements are retained on the Balance Sheet where substantially all the risks and rewards of
ownership remain with the Group. A liability for the agreed repurchase amount is recognised within deposits and other public
borrowings. Repurchase transactions that are managed on a fair value basis are presented within liabilities at fair value through income
statement.
4.2
Liabilities at fair value through Income Statement
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Securities sold under agreements to repurchase
36,512
32,671
36,893
32,841
Debt instruments
811
1,125
–
–
Trading liabilities
10,018
6,307
10,018
6,307
Total liabilities at fair value through income statement
47,341
40,103
46,911
39,148
The majority of the amounts are expected to be settled within 12 months of the balance sheet date.
The amount that would be contractually required to be paid at maturity to the holders of the financial liabilities designated at fair value
through income statement for the Group is $47,439 million (30 June 2023: $40,167 million) and for the Bank is $47,014 million
(30 June 2023: $39,240 million).
ACCOUNTING POLICIES
The Group designates certain liabilities at fair value through the income statement on origination when doing so eliminates or reduces
an accounting mismatch, when the liabilities are managed and their performance is evaluated on a fair value basis or where the
liabilities contain embedded derivatives which must otherwise be separated and carried at fair value. Trading liabilities are incurred
principally for the purpose of repurchasing or settling in the near term and are measured at fair value through the income statement.
Subsequent to initial recognition, liabilities are measured at fair value. Changes in fair value, excluding those due to changes in the
Group’s own credit risk in relation to liabilities designated at fair value through the income statement on origination, are recognised in
net other operating income. Changes in fair value relating to the Group’s own credit risk in relation to liabilities designated at fair value
through the income statement on origination are recognised in other comprehensive income. Interest incurred is recognised within net
interest income on a contractual rate basis, including amortisation of any premium/discount.
This category includes a portfolio of repurchase transactions which is managed and for which performance is evaluated on a fair value
basis.
179
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
180
4.3
Debt issues
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
Note
$M
$M
$M
$M
Medium-term notes
81,865
74,855
68,834
59,829
Commercial paper
20,657
7,800
19,619
7,197
Securitisation notes
4.5
6,902
7,241
–
–
Covered bonds
4.5
35,106
32,371
32,381
28,867
Total debt issues ¹
144,530
122,267
120,834
95,893
Short-term debt issues by currency
USD
21,600
7,855
20,563
7,252
AUD
3,150
900
3,150
900
GBP
3,693
2,551
3,693
2,551
Other currencies
2,770
870
2,770
870
Total short-term debt issues
31,213
12,176
30,176
11,573
Long-term debt issues by currency ²
USD ³
41,043
39,335
35,215
32,748
EUR
26,205
25,077
20,118
17,454
AUD
30,068
29,302
23,114
21,906
GBP
4,439
4,404
4,499
4,531
NZD
2,468
2,822
204
189
JPY
1,120
1,602
1,120
1,576
Other currencies
7,974
7,549
6,388
5,916
Total long-term debt issues
113,317
110,091
90,658
84,320
Maturity distribution of debt issues ⁴
Less than twelve months
49,357
28,540
44,192
23,047
Greater than twelve months
95,173
93,727
76,642
72,846
Total debt issues
144,530
122,267
120,834
95,893
1 Debt issues include a $662 million increase from unrealised movements due to a fair value hedge adjustment partly offset by foreign exchange gains (30 June 2023:
$2,128 million increase from unrealised movements due to foreign exchange losses partly offset by fair value hedge adjustments).
2 Long-term debt disclosed relates to debt issues which have a maturity at inception of greater than 12 months.
3 Includes US$600 million notes issued by the Group in June 2022 through ASB, its New Zealand subsidiary. While the issuance qualifies as Tier 2 capital under
Reserve Bank of New Zealand requirements, it does not qualify for inclusion in the Group’s Tier 2 capital due to the lack of contractual features that give rise to
conversion or write-off at the point of non-viability.
4 Represents the remaining contractual maturity of the underlying instrument.
The Group’s long-term debt issues include notes issued under the: USD70 billion Euro Medium Term Note Programme; the
USD50 billion US Medium Term Note Programme; USD40 billion Covered Bond Programme; Unlimited Domestic Debt Programme;
Unlimited ASB Domestic Medium Term Note Programme; USD25 billion CBA New York Branch Medium Term Note Programme;
EUR7 billion ASB Covered Bond Programme; USD10 billion ASB US Medium Term Note Programme and other applicable debt
documentation. Notes issued under debt programmes are both fixed and variable rate. Interest rate risk associated with the notes is
incorporated within the Bank’s interest rate risk framework. The Bank, from time to time, as part of its balance sheet management, may
consider opportunities to repurchase outstanding long-term debt pursuant to open-market purchases or other means. Such repurchases
help manage the Bank’s debt maturity profile, overall funding costs and assist in meeting regulatory changes and requirements.
180
Notes to the Financial Statements
For the year ended 30 June 2024
181
CBA FINANCIAL REPORT
2024 Annual report
4.3
Debt issues (continued)
ACCOUNTING POLICIES
Debt issues include short and long-term debt issues of the Group and consist of commercial paper, securitisation notes, covered bonds
and medium-term notes.
Debt issues are initially measured at fair value and subsequently measured at amortised cost.
Interest, as well as premiums, discounts and associated issue expenses are recognised in the Income Statement using the effective
interest method from the date of issue, to ensure the carrying value of securities equals their redemption value by maturity date. Any
profits or losses arising from redemption prior to maturity are taken to the Income Statement in the period in which they are realised.
The Group hedges interest rate and foreign currency rate risk on certain debt issues. When fair value hedge accounting is applied to
fixed rate debt issues, the carrying values are adjusted for changes in fair value related to the hedged risks.
181
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
182
4.4
Term funding from central banks
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Term Funding Facility with the RBA
–
49,637
–
49,637
Term funding facilities with the RBNZ
4,228
4,583
–
–
Term funding from central banks
4,228
54,220
–
49,637
The Term Funding Facility (TFF) was announced by the RBA in March 2020 as a part of a package of measures to support the
Australian economy during the COVID-19 pandemic. Under the TFF, the RBA offered three-year funding to authorised deposit taking
institutions through repurchase transactions. Prior to 4 November 2020, TFF funding was provided at a fixed pricing of 0.25% p.a. From
4 November 2020, TFF funding was provided at a fixed rate of 0.1% p.a. Funding was drawn down between May 2020 and June 2021
when the facility closed to new drawdowns. TFF funding was fully repaid by the Group during the year ended 30 June 2024.
Term funding facilities with RBNZ include the Term Lending Facility (TLF) and Funding for Lending Programme (FLP) which were
introduced to provide liquidity to the banking system in New Zealand during the COVID-19 pandemic. FLP funding was available until
6 December 2022 at a floating rate, equal to Official Cash Rate (OCR), for a term of three years. TLF funding was available until
28 July 2021 at a fixed rate based on the prevailing OCR at the time of the transaction, for a duration of one year with the option to
renew annually up to a maximum period of five years. Of the total $4,228 million outstanding TLF and FLP balances, $3,130 million will
mature within 12 months of balance sheet date, and $1,098 million will mature after 12 months (30 June 2023: $450 million matures
within 12 months of the balance sheet date, and $4,133 million matures after 12 months).
ACCOUNTING POLICIES
The term funding liabilities are initially recognised at fair value and subsequently measured at amortised cost using the effective interest
method.
182
Notes to the Financial Statements
For the year ended 30 June 2024
183
CBA FINANCIAL REPORT
2024 Annual report
4.5
Securitisation, covered bonds and transferred assets
The Group enters into transactions in the normal course of business that transfer financial assets to counterparties or to Special
Purpose Vehicles (SPVs). Transferred financial assets that do not qualify for derecognition are typically associated with repurchase
agreements and covered bonds and securitisation programmes. The underlying assets remain on the Group’s balance sheet.
At the balance sheet date, transferred financial assets that did not qualify for derecognition and their associated liabilities are as follows:
Group
Repurchase
agreements
Covered bonds
Securitisation ¹
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
$M
$M
Carrying amount of transferred assets
52,372
41,378
43,415
38,982
7,547
7,889
Carrying amount of associated liabilities ²
52,113
41,299
35,106
32,371
6,902
7,241
For those liabilities that have recourse only
to the transferred assets:
Fair value of transferred assets
7,519
7,839
Fair value of associated liabilities
6,922
7,233
Net position
597
606
Bank
Repurchase
agreements
Covered bonds
Securitisation ³ ⁴
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
$M
$M
Carrying amount of transferred assets
52,647
41,549
39,574
34,171
7,547
7,889
Carrying amount of associated liabilities ²
52,388
41,469
32,381
28,867
7,396
7,689
For those liabilities that have recourse only
to the transferred assets:
Fair value of transferred assets
7,519
7,839
Fair value of associated liabilities
7,396
7,689
Net position
123
150
1 Securitisation liabilities of the Group include RMBS notes issued by securitisation SPVs and held by external investors.
2 Carrying amounts of associated liabilities for repurchase agreements are presented before the effect of balance sheet netting.
3 Securitisation liabilities of the Bank include borrowings from securitisation SPVs, recognised on transfer of residential mortgages by the Bank. The carrying amounts
of associated liabilities from securitisation SPVs are recorded under loans due to controlled entities.
4 Securitisation assets exclude $111,407 million of assets (30 June 2023: $133,621 million), where the Bank holds all of the issued instruments of the securitisation
vehicle.
183
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
184
4.5
Securitisation, covered bonds and transferred assets (continued)
ACCOUNTING POLICIES
Repurchase agreements
Securities sold under agreement to repurchase are retained on the Balance Sheet when substantially all the risks and rewards of
ownership remain with the Group, and the counterparty liability is included separately on the Balance Sheet when cash consideration is
received.
Securitisation programmes
The Group pools and equitably assigns residential mortgages as securities to investors through a series of wholly controlled
securitisation vehicles. Where the Group retains substantially all of the risks and rewards associated with the mortgages, it continues to
recognise the mortgages on the Balance Sheet. The Group is entitled to any residual income of the securitisation programmes after all
payments due to investors have been met, where the Group is the income unitholder. The investors have recourse only to the pool of
mortgages in the SPV they have invested in.
Covered bonds programmes
To complement existing wholesale funding sources, the Group has established two global covered bond programmes for the Bank and
ASB. Certain residential mortgages have been assigned to SPV’s associated with covered bond programmes to provide security on the
payments to investors. The Group is entitled to any residual income after all payments due to covered bond investors have been met.
As the Group retains substantially all of the risks and rewards associated with the mortgages, it continues to recognise the mortgages
on the Balance Sheet. The covered investors have dual recourse to the Bank and the covered pool assets.
Critical accounting judgements and estimates
The Group exercises judgement to assess whether a structured entity should be consolidated based on the Bank’s power over the
relevant activities of the entity and the significance of its exposure to variable returns of the structured entity. Such assessments are
predominantly required for the Group’s securitisation programmes, and structured transactions such as covered bond programmes.
184
Notes to the Financial Statements
For the year ended 30 June 2024
185
CBA FINANCIAL REPORT
2024 Annual report
5
Our investing, trading and other banking activities
OVERVIEW
In addition to loans, the Group holds other assets to support its activities. Cash and liquid assets, receivables from financial institutions,
trading assets and investment securities are held for liquidity purposes, to generate returns and to meet customer demand. The mix and
nature of assets is driven by multiple factors including the Board’s risk appetite, regulatory requirements, customer demand and the
generation of shareholder returns.
The Group also transacts derivatives to meet customer demand and to manage its financial risks (interest rate, foreign currency,
commodity and credit risks).
Refer to Note 9.1 for additional information relating to the Group’s approach to managing financial risks through the use of derivatives.
5.1
Cash and liquid assets
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Notes, coins, cash at banks and money at short call
47,321
107,172
42,896
98,730
Securities purchased under agreements to resell
35,759
9,447
35,359
9,637
Total cash and liquid assets
83,080
116,619
78,255
108,367
ACCOUNTING POLICIES
Cash and liquid assets include cash at branches, cash at banks, nostro balances, money at call with an original maturity of three months
or less and securities purchased under agreements to resell. Cash and liquid assets are initially recognised at fair value and
subsequently measured at amortised cost. Interest is recognised in the Income Statement using the effective interest method.
Securities, including bonds and equities, purchased under agreements to resell are not recognised in the financial statements where
substantially all the risks and rewards of ownership remain with the counterparty. An asset for the agreed resale amount by the
counterparty is recognised within cash and liquid assets. Reverse repurchase transactions that are managed on a fair value basis are
presented within assets at fair value through income statement.
5.2
Receivables from and payables to financial institutions
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Receivables from financial institutions
Collateral placed
5,073
5,243
4,742
4,908
Other receivables
789
836
686
514
Total receivables from financial institutions
5,862
6,079
5,428
5,422
Payables to financial institutions
Collateral received
4,957
5,802
4,734
5,567
Other payables
19,676
16,108
19,402
15,699
Total payables to financial institutions
24,633
21,910
24,136
21,266
The majority of receivables from and payables to financial institutions are expected to be settled within 12 months of the balance sheet
date.
ACCOUNTING POLICIES
Receivables from and payables to financial institutions include cash collateral, short-term deposits and other balances. Cash collateral
includes initial and variation margins in relation to derivative transactions and varies based on trading and hedging activities.
Receivables from and payables to financial institutions are initially recognised at fair value and subsequently measured at amortised
cost.
185
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
186
5.3
Assets at fair value through income statement
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
Assets at fair value through income statement
$M
$M
$M
$M
Trading
Government bonds, notes and securities
18,780
14,728
18,780
14,721
Corporate and financial institution bonds, notes and securities
6,024
5,729
6,134
5,729
Commodities
1,340
2,042
1,340
2,042
Total trading assets
26,144
22,499
26,254
22,492
Other
Securities purchased under agreements to resell
46,069
38,999
46,168
39,069
Commodities financing and other lending
6,771
6,079
6,771
6,079
Shares and equity investments
49
50
1
1
Total other assets at fair value through income statement
52,889
45,128
52,940
45,149
Total assets at fair value through income statement
79,033
67,627
79,194
67,641
Maturity distribution of assets at fair value through income statement
Less than twelve months
75,329
65,499
75,586
65,606
More than twelve months
3,655
2,078
3,607
2,034
Maturity undefined
49
50
1
1
Total assets at fair value through income statement
79,033
67,627
79,194
67,641
ACCOUNTING POLICIES
Assets at fair value through income statement include financial assets held for trading, commodity financing transactions, and other
financial assets designated at fair value through profit or loss. This category includes a portfolio of reverse repurchase transactions
which is managed and for which performance is evaluated on a fair value basis.
Trading assets are those acquired principally for sale in the near term. Commodity inventories are measured at fair value less costs to
sell in accordance with the broker trader exemption under AASB 102 Inventories.
Commodity financing and other lending are mandatorily recognised at fair value through profit or loss, because the contractual cash
flows are not solely payments of principal and interest. Other financial assets are measured at fair value through profit or loss, because
they are managed with the objective of realising cash flows through sale. Assets at fair value through income statement are measured
at fair value with changes in fair value recognised in net other operating income.
186
Notes to the Financial Statements
For the year ended 30 June 2024
187
CBA FINANCIAL REPORT
2024 Annual report
5.4
Derivative financial instruments and hedge accounting
Derivative financial instruments are contracts for which values are derived from one or more underlying prices, indexes or other
variables. Derivatives are classified as “held for trading” or “held for hedging”. Held for trading derivatives are contracts entered into in
order to meet customers’ needs, to undertake market making and positioning activities, or for risk management purposes that are not
designated in hedge accounting relationships. Held for hedging derivatives are instruments held for risk management purposes, which
meet the criteria for hedge accounting.
Group
30 Jun 24
30 Jun 23
Fair value
asset
Fair value
liability
Fair value
asset
Fair value
liability
Derivative assets and liabilities
$M
$M
$M
$M
Derivatives held for trading
15,412
(15,069)
20,862
(21,899)
Hedging derivatives
2,646
(3,781)
3,083
(3,448)
Total derivative assets/(liabilities)
18,058
(18,850)
23,945
(25,347)
Bank
30 Jun 24
30 Jun 23
Fair value
asset
Fair value
liability
Fair value
asset
Fair value
liability
Derivative assets and liabilities
$M
$M
$M
$M
Derivatives held for trading
16,501
(16,821)
22,068
(23,619)
Hedging derivatives
3,296
(3,219)
3,517
(3,109)
Total derivative assets/(liabilities)
19,797
(20,040)
25,585
(26,728)
Trading derivatives
The fair value of derivative financial instruments held for trading are set out in the following tables:
Group
30 Jun 24
30 Jun 23
Fair value
asset
Fair value
liability
Fair value
asset
Fair value
liability
Derivative assets and liabilities
$M
$M
$M
$M
Foreign exchange rate related contracts:
Forwards
7,160
(6,072)
9,713
(9,512)
Swaps
5,540
(4,086)
7,020
(5,185)
Options
139
(131)
187
(211)
Total foreign exchange rate related contracts
12,839
(10,289)
16,920
(14,908)
Interest rate related contracts:
Swaps
1,228
(3,712)
1,771
(5,059)
Futures
–
–
1
–
Options
473
(612)
1,391
(1,678)
Total interest rate related contracts
1,701
(4,324)
3,163
(6,737)
Credit related swaps
39
(66)
26
(49)
Equity related contracts:
Options
–
(3)
–
(4)
Total equity related contracts
–
(3)
–
(4)
Commodity related contracts:
Swaps
573
(203)
576
(158)
Futures
167
–
109
–
Options
57
(163)
14
(22)
Total commodity related contracts
797
(366)
699
(180)
Identified embedded derivatives
36
(21)
54
(21)
Total derivative assets/(liabilities) held for trading
15,412
(15,069)
20,862
(21,899)
Held for trading derivatives are expected to be recovered or due to be settled within 12 months of the balance sheet date.
187
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
188
5.4
Derivative financial instruments and hedge accounting (continued)
Bank
30 Jun 24
30 Jun 23
Fair value
asset
Fair value
liability
Fair value
asset
Fair value
liability
Derivative assets and liabilities
$M
$M
$M
$M
Foreign exchange rate related contracts:
Forwards
7,123
(6,057)
9,640
(9,498)
Swaps
6,168
(4,940)
7,739
(6,014)
Options
135
(127)
180
(209)
Derivatives held with controlled entities
495
(1,022)
606
(1,070)
Total foreign exchange rate related contracts
13,921
(12,146)
18,165
(16,791)
Interest rate related contracts:
Swaps
1,235
(3,599)
1,731
(4,886)
Futures
–
–
1
–
Options
473
(612)
1,391
(1,678)
Derivatives held with controlled entities
–
(8)
1
(11)
Total interest rate related contracts
1,708
(4,219)
3,124
(6,575)
Credit related swaps
39
(66)
26
(49)
Equity related contracts:
Options
–
(3)
–
(4)
Total equity related contracts
–
(3)
–
(4)
Commodity related contracts:
Swaps
573
(203)
576
(157)
Futures
167
–
109
–
Options
57
(163)
14
(22)
Total commodity related contracts
797
(366)
699
(179)
Identified embedded derivatives
36
(21)
54
(21)
Total derivative assets/(liabilities) held for trading
16,501
(16,821)
22,068
(23,619)
Held for trading derivatives are expected to be recovered or due to be settled within 12 months of the balance sheet date.
ACCOUNTING POLICIES
Derivatives held for trading purposes are initially recognised at fair value. Subsequent to initial recognition, gains or losses on trading
derivatives are recognised in the Income Statement.
188
Notes to the Financial Statements
For the year ended 30 June 2024
189
CBA FINANCIAL REPORT
2024 Annual report
5.4
Derivative financial instruments and hedge accounting (continued)
Hedging instruments
The following tables provide details of the Group’s and the Bank’s hedging instruments by the type of hedge relationship in which they
are designated and the type of hedged risk.
Group
30 Jun 24
Notional amounts
Fair value
Due within
Due from
Due beyond
Derivative
Derivative
1 year
1 to 5 years
5 years
Total
asset
liability
Hedged risk
$M
$M
$M
$M
$M
$M
Fair value hedges
Interest rate
13,653
32,652
26,885
73,190
98
(519)
Interest rate and
foreign exchange
5,231
14,555
9,981
29,767
1,589
(2,926)
Total fair value hedges
18,884
47,207
36,866
102,957
1,687
(3,445)
Cash flow hedges
Interest rate
357,400
162,411
7,592
527,403
8
(10)
Foreign exchange
6,535
4,839
5,311
16,685
895
(293)
Commodity price
5
31
13
49
16
–
Total cash flow hedges
363,940
167,281
12,916
544,137
919
(303)
Net investment hedges
Foreign exchange
4,633
376
–
5,009
40
(33)
Total hedging derivative assets/(liabilities)
387,457
214,864
49,782
652,103
2,646
(3,781)
Group
30 Jun 23
Notional amounts
Fair value
Due within
Due from
Due beyond
Derivative
Derivative
1 year
1 to 5 years
5 years
Total
asset
liability
Hedged risk
$M
$M
$M
$M
$M
$M
Fair value hedges
Interest rate
13,437
31,035
29,751
74,223
10
(600)
Interest rate and
foreign exchange
3,201
13,750
13,411
30,362
2,052
(2,724)
Total fair value hedges
16,638
44,785
43,162
104,585
2,062
(3,324)
Cash flow hedges
Interest rate
434,917
180,738
9,037
624,692
8
(5)
Foreign exchange
3,473
5,988
3,738
13,199
960
(78)
Commodity price
5
30
24
59
20
–
Total cash flow hedges
438,395
186,756
12,799
637,950
988
(83)
Net investment hedges
Foreign exchange
5,281
–
–
5,281
33
(41)
Total hedging derivative assets/(liabilities)
460,314
231,541
55,961
747,816
3,083
(3,448)
189
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
190
5.4
Derivative financial instruments and hedge accounting (continued)
Bank
30 Jun 24
Notional amounts
Fair value
Due within
Due from
Due beyond
Derivative
Derivative
1 year
1 to 5 years
5 years
Total
asset ¹
liability ¹
Hedged risk
$M
$M
$M
$M
$M
$M
Fair value hedges
Interest rate
13,296
28,540
24,001
65,837
52
(503)
Interest rate and
foreign exchange
6,319
19,044
14,610
39,973
2,188
(2,465)
Total fair value hedges
19,615
47,584
38,611
105,810
2,240
(2,968)
Cash flow hedges
Interest rate
320,765
138,484
7,188
466,437
1
(2)
Foreign exchange
7,936
3,571
5,311
16,818
1,000
(233)
Commodity price
5
31
13
49
16
–
Total cash flow hedges
328,706
142,086
12,512
483,304
1,017
(235)
Net investment hedges
Foreign exchange
3,506
–
–
3,506
39
(16)
Total hedging derivative assets/(liabilities)
351,827
189,670
51,123
592,620
3,296
(3,219)
1 Derivative assets include $1,618 million of derivatives held with controlled entities, derivative liabilities include $522 million of derivatives held with controlled entities.
Bank
30 Jun 23
Notional amounts
Fair value
Due within
Due from
Due beyond
Derivative
Derivative
1 year
1 to 5 years
5 years
Total
asset ¹
liability ¹
Hedged risk
$M
$M
$M
$M
$M
$M
Fair value hedges
Interest rate
12,865
28,144
25,208
66,217
24
(580)
Interest rate and
foreign exchange
4,730
16,924
14,886
36,540
2,565
(2,389)
Total fair value hedges
17,595
45,068
40,094
102,757
2,589
(2,969)
Cash flow hedges
Interest rate
416,123
146,289
8,449
570,861
3
(6)
Foreign exchange
3,473
5,866
4,500
13,839
872
(121)
Commodity price
5
30
24
59
20
–
Total cash flow hedges
419,601
152,185
12,973
584,759
895
(127)
Net investment hedges
Foreign exchange
3,032
–
–
3,032
33
(13)
Total hedging derivative assets/(liabilities)
440,228
197,253
53,067
690,548
3,517
(3,109)
1 Derivative assets include $1,451 million of derivatives held with controlled entities, derivative liabilities include $745 million of derivatives held with controlled entities.
The Bank will be required to post collateral on derivatives with securitisation and covered bond trusts it controls, or novate the
derivatives to other appropriately rated counterparties in the event that the Bank’s credit rating falls below specified thresholds. The
thresholds for collateral posting vary between two and three notches from the current rating, depending on the ratings agency. The
thresholds for novation vary between four and six notches from the current rating, depending on the ratings agency. The fair value of
funding costs associated with these collateral arrangements has been recognised by the Bank as a funding valuation adjustment. The
adjustment did not have a material impact on the Bank’s Income Statement for the year. As the arrangement is between the Bank and
the trusts, the fair value is eliminated on consolidation and will only be recognised by the Group if the trusts are deconsolidated.
As at 30 June 2024, the weighted average fixed interest rate of interest rate swaps hedging interest rate risk was 3.60% (30 June 2023:
2.93%). The major currency pairs of cross currency swaps designated in hedge relationships are receive USD/pay AUD and receive
EUR/pay USD with weighted average foreign currency rates of: AUD/USD 0.74 and USD/EUR 0.83 (30 June 2023: AUD/USD 0.76,
USD/EUR 0.83).
In addition to derivative instruments used to hedge foreign currency risk, the Group and the Bank designate debt issues as hedging
instruments of certain foreign exchange risk exposures. The carrying value of debt issues designated as cash flow hedging instruments
as at 30 June 2024 was $933 million with average maturity of 6 years for the Group (30 June 2023: $1,008 million with average maturity
of 6 years) and nil for the Bank (30 June 2023: nil).
190
Notes to the Financial Statements
For the year ended 30 June 2024
191
CBA FINANCIAL REPORT
2024 Annual report
Hedged items in fair value hedges
The tables below provides details of the Group’s and the Bank’s hedged items designated in fair value hedge relationships by the type
of hedged risk.
Group
30 Jun 24
30 Jun 23
Carrying
Fair value
Carrying
Fair value
amount
adjustment ¹ ²
amount
adjustment ¹ ²
Hedged items
Hedged risk
$M
$M
$M
$M
Investment securities at fair value through
other comprehensive income
Interest rate
63,142
(2,138)
52,040
(2,871)
Investment securities at fair value through
other comprehensive income
Interest rate and
foreign exchange
4,832
(403)
5,325
(474)
Loans and other receivables
Interest rate
435
–
411
(3)
Deposits and other public borrowings
Interest rate
(5,776)
14
(5,567)
23
Deposits and other public borrowings
Interest rate and
foreign exchange
–
–
–
–
Debt issues
Interest rate
(31,670)
1,817
(28,011)
1,434
Debt issues
Interest rate and
foreign exchange
(53,840)
3,152
(55,134)
4,972
Loan capital
Interest rate
(13,660)
2,294
(5,129)
1,083
Loan capital
Interest rate and
foreign exchange
(4,766)
658
(11,542)
1,752
Bank
30 Jun 24
30 Jun 23
Carrying
Fair value
Carrying
Fair value
amount
adjustment ¹ ²
amount
adjustment ¹ ²
Hedged items
Hedged risk
$M
$M
$M
$M
Investment securities at fair value through
other comprehensive income
Interest rate
55,189
(1,882)
46,216
(2,462)
Investment securities at fair value through
other comprehensive income
Interest rate and
foreign exchange
4,788
(403)
5,325
(474)
Loans and other receivables
Interest rate
417
–
378
(3)
Shares in and loans to controlled entities
Interest rate
509
(9)
753
(15)
Shares in and loans to controlled entities
Interest rate and
foreign exchange
25,995
(1,805)
21,514
(2,447)
Deposits and other public borrowings
Interest rate
(5,776)
14
(5,567)
23
Deposits and other public borrowings
Interest rate and
foreign exchange
–
–
–
–
Debt issues
Interest rate
(18,508)
1,547
(8,939)
1,019
Debt issues
Interest rate and
foreign exchange
(43,655)
2,342
(44,398)
3,798
Loan capital
Interest rate
(12,759)
2,294
(4,225)
1,083
Loan capital
Interest rate and
foreign exchange
(4,766)
658
(11,542)
1,752
1 Represents the accumulated amount of the fair value adjustment included in the carrying amount. The cumulative amount that is related to ceased hedge
relationships where the risk being hedged was interest rate and foreign exchange risk is nil.
2 Changes in fair value of the hedged item used as a basis to determine effectiveness. The changes in fair value of the hedged items are recognised in net other
operating income.
5.4
Derivative financial instruments and hedge accounting (continued)
191
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
192
5.4
Derivative financial instruments and hedge accounting (continued)
Hedged items in cash flow hedges and net investment hedges
The tables below provides details of the Group’s and the Bank’s hedged items designated in cash flow and net investment hedge
relationships by the type of hedged risk.
Group
30 Jun 24
30 Jun 23
Foreign
Foreign
Cash flow
currency
Cash flow
currency
hedge
translation
hedge
translation
reserve ¹
reserve ²
reserve ¹
reserve ²
Hedged items
Hedged risk
$M
$M
$M
$M
Cash flow hedges
Investment securities at fair value through other
comprehensive income
Foreign exchange
(3)
–
(4)
–
Loans and other receivables
Interest rate
(3,365)
–
(6,928)
–
Loans and other receivables
Foreign exchange
(3)
–
(23)
–
Deposits and other public borrowings
Interest rate
1,395
–
4,072
–
Debt issues
Interest rate
82
–
131
–
Debt issues
Foreign exchange
(367)
–
(41)
–
Loan capital
Interest rate
–
–
–
–
Loan capital
Foreign exchange
145
–
233
–
Highly probable forecast transactions ³
Foreign exchange
(44)
–
(51)
–
Highly probable forecast transactions
Commodity price
14
–
13
–
Net investment hedges
Foreign operations
Foreign exchange
–
32
–
(20)
Total
(2,146)
32
(2,598)
(20)
1 Represents the accumulated effective amount of the hedging instrument deferred to cash flow hedge reserve. The cumulative amount related to ceased hedge
relationships where the risk being hedged is interest rate and foreign exchange risk is a gain of $33 million (30 June 2023: $32 million gain). A cumulative loss of
$7 million related to ceased hedge relationships was amortised to the income statement during the period (30 June 2023: $46 million gain).
2 Represents the accumulated effective amount of the hedging instrument deferred to foreign currency translation reserve.
3 A $1 million loss was reclassified to the income statement during the year ended 30 June 2023 as a result of highly probable forecast transactions no longer meeting
the required criteria.
192
Notes to the Financial Statements
For the year ended 30 June 2024
193
CBA FINANCIAL REPORT
2024 Annual report
5.4
Derivative financial instruments and hedge accounting (continued)
Bank
30 Jun 24
30 Jun 23
Foreign
Foreign
Cash flow
currency
Cash flow
currency
hedge
translation
hedge
translation
reserve ¹
reserve ²
reserve ¹
reserve ²
Hedged items
Hedged risk
$M
$M
$M
$M
Cash flow hedges
Investment securities at fair value through other
comprehensive income
Foreign exchange
(3)
–
(4)
–
Loans and other receivables
Interest rate
(3,061)
–
(6,206)
–
Loans and other receivables
Foreign exchange
(3)
–
(23)
–
Shares in and loans to controlled entities
Interest rate
–
–
–
–
Shares in and loans to controlled entities
Foreign exchange
187
–
(69)
–
Deposits and other public borrowings
Interest rate
1,145
–
3,177
–
Debt issues
Interest rate
(2)
–
9
–
Debt issues
Foreign exchange
(170)
–
117
–
Loan capital
Interest rate
–
–
–
–
Loan capital
Foreign exchange
147
–
191
–
Highly probable forecast transactions
Commodity price
14
–
13
–
Net investment hedges
Foreign operations
Foreign exchange
–
27
–
(10)
Total
(1,746)
27
(2,795)
(10)
1 Represents the accumulated effective amount of the hedging instrument deferred to cash flow hedge reserve. The cumulative amount related to ceased hedge
relationships where the risk being hedged is interest rate and foreign exchange risk is a loss of $1 million (30 June 2023: $18 million loss). A cumulative loss of
$16 million related to ceased hedge relationships was amortised to the income statement during the period (30 June 2023: $3 million loss).
2 Represents the accumulated effective amount of the hedging instrument deferred to foreign currency translation reserve.
193
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
194
5.4
Derivative financial instruments and hedge accounting (continued)
Hedge effectiveness
The tables below details effectiveness of the Group’s and the Bank’s hedges by the type of hedge relationship and the type of
hedged risk.
Group
30 Jun 24
30 Jun 23
Change in
value of
hedged item ¹
Change in
value of
hedging
instrument
Hedge
ineffectiveness
recognised in
Income
Statement ²
Change in
value of
hedged item ¹
Change in
value of
hedging
instrument
Hedge
ineffectiveness
recognised in
Income
Statement ²
$M
$M
$M
$M
$M
$M
Fair value hedges
Interest rate risk
894
(885)
9
(133)
106
(27)
Interest rate and foreign exchange risk
(56)
22
(34)
(558)
578
20
Foreign exchange
–
–
–
–
–
–
Total fair value hedges
838
(863)
(25)
(691)
684
(7)
Cash flow hedges and net
investment hedges
Interest rate
(836)
841
5
1,297
(1,296)
1
Foreign exchange
(779)
766
(13)
(1,267)
1,275
8
Commodity prices
–
–
–
17
(18)
(1)
Total cash flow hedges and net investment
hedges
(1,615)
1,607
(8)
47
(39)
8
1 Changes in value of hedged items for fair value hedges are recognised in net other operating income. Changes in values of hedged items for cash flow hedges are
not recognised in the financial statements and are only used as a basis for calculating ineffectiveness. During the year, unrealised gains deferred to the cash flow
hedge reserve were $1,590 million (30 June 2023: unrealised losses of $7 million) and a gain recognised in foreign currency translation reserve was $17 million
(30 June 2023: $32 million loss).
2 Hedge ineffectiveness is recognised in net other operating income.
Bank
30 Jun 24
30 Jun 23
Change in
value of
hedged item ¹
Change in
value of
hedging
instrument
Hedge
ineffectiveness
recognised in
Income
Statement ²
Change in
value of
hedged item ¹
Change in
value of
hedging
instrument
Hedge
ineffectiveness
recognised in
Income
Statement ²
$M
$M
$M
$M
$M
$M
Fair value hedges
Interest rate risk
815
(807)
8
(284)
255
(29)
Interest rate and foreign exchange risk
410
(428)
(18)
707
(644)
63
Foreign exchange
(15)
15
–
10
(10)
–
Total fair value hedges
1,210
(1,220)
(10)
433
(399)
34
Cash flow hedges and net
investment hedges
Interest rate
(1,088)
1,096
8
1,367
(1,369)
(2)
Foreign exchange
(1,102)
1,091
(11)
(1,187)
1,194
7
Commodity prices
–
–
–
17
(18)
(1)
Total cash flow hedges and net investment
hedges
(2,190)
2,187
(3)
197
(193)
4
1 Changes in value of hedged items for fair value hedges are recognised in net other operating income. Changes in value of hedged items for cash flow hedges are
not recognised in the financial statements and are only used as a basis for calculating ineffectiveness. During the year, unrealised gains deferred to the cash flow
hedge reserve were $2,176 million (30 June 2023: unrealised losses of $171 million), and a gain recognised in the net investment hedge reserve was $11 million (30
June 2023: $22 million loss).
2 Hedge ineffectiveness is recognised in net other operating income.
194
Notes to the Financial Statements
For the year ended 30 June 2024
195
CBA FINANCIAL REPORT
2024 Annual report
5.4
Derivative financial instruments and hedge accounting (continued)
ACCOUNTING POLICIES
Derivatives transacted for hedging purposes
Derivatives are initially measured at fair value. Subsequent to initial recognition, gains or losses on derivatives are recognised in the
Income Statement, unless they are entered into for hedging purposes and designated in a cash flow hedge.
Hedging strategy and hedge accounting
The Group risk management strategy (refer to notes 9.1 and 9.3) is to manage market risks within risk limits to minimise profit and
capital volatility. The use of derivative and other hedging instruments for hedging purposes gives rise to potential volatility in the Income
Statement because of mismatches in the accounting treatment between derivatives and other hedging instruments and the underlying
exposures being hedged. The Group and the Bank apply hedge accounting to reduce volatility in the Income Statement from hedging
activities undertaken.
Fair value hedges
Fair value hedges are used by the Group to manage exposure to changes in the fair value of an asset, liability or unrecognised firm
commitment, predominantly associated with investment securities, debt issues and loan capital. Changes in fair values can arise from
fluctuations in interest or foreign exchange rates. The Group principally uses interest rate swaps, cross currency swaps and futures to
protect against such fluctuations.
Changes in the value of fair value hedges are recognised in the Income Statement, together with changes in the fair value of the hedged
asset or liability that are attributable to the hedged risk. All gains and losses associated with the ineffective portion of fair value hedge
relationships are recognised immediately in net other operating income.
If the hedge relationship no longer meets the criteria for hedge accounting, it is discontinued. For fair value hedges of interest rate risk,
the fair value adjustment to the hedged item is amortised to the Income Statement from the date of discontinuation over the period to
maturity of the previously designated hedge relationship based on a recalculated effective interest rate. If the hedged item is sold or
repaid, the unamortised fair value adjustment is recognised immediately in the Income Statement.
Cash flow hedges
Cash flow hedges are used by the Group to manage exposure to variability in future cash flows, which could affect profit or loss and
may result from fluctuations in interest and exchange rates or in commodity prices on financial assets, financial liabilities or highly
probable forecast transactions, predominantly associated with floating rate domestic loans and deposits. The Group principally uses
interest rate swaps, cross currency swaps, futures and commodity related swaps to protect against such fluctuations.
Changes in fair value associated with the effective portion of a cash flow hedge are recognised through Other Comprehensive Income in
the cash flow hedge reserve within equity. Ineffective portions are recognised immediately in the Income Statement. Amounts deferred
in equity are transferred to the Income Statement in the period in which the hedged forecast transaction takes place.
When a hedging instrument expires or is sold, terminated or exercised, or when the hedge no longer meets the criteria for hedge
accounting, any cumulative gain or loss existing in equity at that time remains in equity and is reclassified to profit or loss in the period in
which the hedged item affects profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that
was reported in equity is recycled immediately to the Income Statement. Where it is appropriate, non-derivative financial assets and
liabilities are also designated as hedging instruments in cash flow hedge relationships.
Net investment hedges
The Group holds investments in foreign operations, where changes in net assets resulting from changes in foreign currency rates are
recognised in the foreign currency translation reserve and result in volatility in shareholders’ equity. To protect against the foreign
currency risk, the Group enters into foreign currency forwards that are designated as hedging instruments in net investment hedges.
Gains and losses on derivative contracts relating to the effective portion of the net investment hedge are recognised in the foreign
currency translation reserve in equity. Ineffective portions are recognised immediately in the Income Statement. Gains and losses
accumulated in equity are included in the Income Statement when the foreign subsidiary or branch is disposed of.
Risk components
In some hedging relationships, the Group and the Bank designate risk components of hedged items as follows:
• benchmark interest rate risk as a component of interest rate risk, such as the Bank Bill Benchmark Rate component; and
• spot exchange rate risk as a component of foreign currency risk for foreign currency denominated financial assets and liabilities.
Hedging the benchmark interest rate risk or spot exchange rate risk components results in other risks, such as credit risk and liquidity
risk, being excluded from the hedge accounting relationship.
195
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
196
5.4
Derivative financial instruments and hedge accounting (continued)
Economic relationships and hedge effectiveness
The Group performs both prospective and retrospective tests to determine the economic relationship between the hedged item and the
hedging instrument, and to assess hedge effectiveness. At inception of the hedge relationship, prospective testing is performed on a
matched terms basis. This test checks that the critical terms are matched between the hedging instrument and the hedged item. At the
same time a hedging ratio is established by matching the notional of the derivatives with the principal of the portfolio or financial
instruments being hedged. In most cases the ratio is 100%. Retrospective testing for each reporting period uses a regression model,
which compares the change in the fair value of the hedged item and the change in the fair value of the hedging instrument. For a hedge
to be deemed effective, the change in fair values should be within 80% to 125% of each other. Should the result fall outside this range
the hedge would be deemed ineffective and recognised immediately through the Income Statement in line with each hedge relationship
policy above.
Sources of hedge ineffectiveness affecting hedge accounting are:
• differences in discounting between the hedged item and the hedging instrument. Collateralised derivatives are discounted using
Overnight Indexed Swaps (OIS) discount curves, which are not applied to the hedged item;
• change in the credit risk of the hedging instrument; and
• mismatches between the contractual terms of the hedged item and the hedging instrument.
No other sources of hedge ineffectiveness have arisen during the year.
Embedded derivatives
In certain instances, a derivative may be embedded within a financial liability host contract. It is accounted for separately as a stand-
alone derivative at fair value through income statement, where:
• the host contract is not carried at fair value through the income statement; and
• the economic characteristics and risks of the embedded derivative are not closely related to the host contract.
196
Notes to the Financial Statements
For the year ended 30 June 2024
197
CBA FINANCIAL REPORT
2024 Annual report
5.5
Investment securities
Group ¹
Bank ¹
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Investment securities at fair value through OCI
Government bonds, notes and securities
79,215
65,865
73,922
63,161
Corporate and financial institution bonds, notes and securities
4,812
7,723
3,599
6,141
Covered bonds, mortgage backed securities and SSA ²
10,309
9,084
7,896
6,537
Shares and equity investments
2,438
1,999
2,430
1,992
Total investment securities at fair value through OCI
96,774
84,671
87,847
77,831
Investment securities at amortised cost
Mortgage backed securities
1,239
2,032
1,239
2,032
Total investment securities at amortised cost
1,239
2,032
1,239
2,032
Total investment securities
98,013
86,703
89,086
79,863
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 Supranational, Sovereign and Agency Securities (SSA).
As at 30 June 2024, investment securities at fair value through other comprehensive income expected to be recovered within 12 months
of the balance sheet date were $9,878 million (30 June 2023: $12,154 million) for the Group, and $8,533 million (30 June 2023: $10,551
million) for the Bank. As at 30 June 2024, investment securities at amortised cost amounts expected to be recovered within 12 months
of the balance sheet date were $598 million (30 June 2023: $1,671 million) for the Group and the Bank.
Contractual maturity distribution and yield analysis
Group
Maturity Period at 30 June 24
0 to 1 year
1 to 5 years
5 to 10 years
10 or more years
Non-
maturing
Total
$M
%
$M
%
$M
%
$M
%
$M
$M
Investment securities at fair value
through OCI
Government bonds, notes and securities
6,219
4.60
25,692
4.48
36,709
4.74
10,595
5.16
–
79,215
Corporate and financial institution bonds,
notes and securities
3,289
5.19
1,481
5.05
42
5.35
–
–
–
4,812
Covered bonds, mortgage backed
securities and SSA
370
5.49
7,246
4.68
766
4.71
1,927
5.56
–
10,309
Shares and equity investments
–
–
–
–
–
–
–
–
2,438
2,438
Total investment securities at fair value
through OCI
9,878
34,419
37,517
12,522
2,438
96,774
Investment securities at amortised
cost
Mortgage backed securities
–
–
–
–
–
–
1,239
5.33
–
1,239
Total investment securities
9,878
34,419
37,517
13,761
2,438
98,013
197
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
198
5.5
Investment securities (continued)
ACCOUNTING POLICIES
Investment securities primarily include publicly traded debt securities held as part of the Group’s liquidity portfolio.
Investment securities at fair value through other comprehensive income
Debt securities
This category includes debt securities held within the business model whose objective is achieved by both collecting contractual cash
flows and selling the assets. The contractual cash flows on these financial assets comprise payments of principal and interest only.
These securities are initially recognised at their fair value plus directly attributable transaction costs. Subsequent to initial recognition,
they are measured at fair value through other comprehensive income.
Interest income and foreign exchange gains and losses on these securities are recognised in the Income Statement. The securities are
assessed for impairment using the expected credit loss approach described in Note 3.2. Impairment is recognised in the loan
impairment expense line in the Income Statement.
When debt securities at fair value through other comprehensive income are derecognised, the cumulative gain or loss recognised in
Other Comprehensive Income is reclassified to the net other operating income line in the Income Statement.
Equity securities
This category also includes non-traded equity instruments designated at fair value through other comprehensive income. Fair value
gains and losses and foreign exchange gains and losses on these equity instruments are recognised in Other Comprehensive Income
and are not reclassified to the Income Statement on derecognition.
Investment securities at amortised cost
This category includes debt securities held within the business model whose objective is to hold financial assets in order to collect
contractual cash flows. The contractual cash flows on these financial assets comprise the payment of principal and interest only. These
securities are initially recognised at their fair value plus directly attributable transaction costs. Subsequent to initial recognition, they are
measured at amortised cost using the effective interest method and are presented net of provisions for impairment. For the accounting
policy on provisions for impairment, refer to Note 3.2.
198
Notes to the Financial Statements
For the year ended 30 June 2024
199
CBA FINANCIAL REPORT
2024 Annual report
6
Other assets
OVERVIEW
The Group’s other assets include assets not included in its lending, investing, trading and other banking activities. Other assets include
right-of-use assets, property, plant and equipment held for own use and for lease through our asset finance business and intangible
assets. Other assets also include software, brand names and goodwill. These assets support the Group’s business activities.
6.1
Property, plant and equipment
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Right-of-use assets
At cost
4,396
4,473
4,133
4,073
Accumulated depreciation
(2,225)
(1,993)
(2,140)
(1,805)
Closing balance
2,171
2,480
1,993
2,268
Land and buildings
At 30 June valuation
485
480
461
457
Total land and buildings
485
480
461
457
Leasehold improvements
At cost
1,307
1,507
1,153
1,319
Accumulated depreciation
(777)
(1,004)
(672)
(872)
Closing balance
530
503
481
447
Equipment
At cost
1,505
1,649
1,147
1,244
Accumulated depreciation
(1,089)
(1,229)
(825)
(945)
Closing balance
416
420
322
299
Total right-of-use assets and property, plant and equipment held for
own use
3,602
3,883
3,257
3,471
Assets held as lessor
At cost
116
1,592
116
116
Accumulated depreciation
(42)
(525)
(42)
(38)
Closing balance
74
1,067
74
78
Total property, plant and equipment
3,676
4,950
3,331
3,549
199
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
200
6.1
Property, plant and equipment (continued)
Reconciliation of movements in the carrying amount of Property, plant and equipment is set out below:
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Right-of-use assets
Carrying amount at the beginning of the year
2,480
2,667
2,268
2,462
Additions
193
294
139
232
Disposals
(23)
(21)
–
(21)
Depreciation
(477)
(467)
(414)
(407)
Foreign currency translation adjustment
(2)
7
–
2
Carrying amount at the end of the year
2,171
2,480
1,993
2,268
Land and buildings
Carrying amount at the beginning of the year
480
481
457
448
Additions
5
15
4
11
Disposals
(2)
(22)
(2)
(11)
Net revaluations
20
25
20
29
Depreciation
(21)
(25)
(21)
(25)
Reclassification to assets held for sale
3
5
3
5
Foreign currency translation adjustment
–
1
–
–
Carrying amount at the end of the year
485
480
461
457
Leasehold improvements
Carrying amount at the beginning of the year
503
450
447
395
Additions
136
154
129
143
Disposals
(6)
(11)
(4)
(11)
Depreciation
(103)
(92)
(91)
(81)
Foreign currency translation adjustment
–
2
–
1
Carrying amount at the end of the year
530
503
481
447
Equipment
Carrying amount at the beginning of the year
420
393
299
248
Additions
161
187
150
153
Disposals
(10)
(2)
(6)
(2)
Depreciation
(154)
(131)
(121)
(100)
Other transfers ¹
–
(29)
–
–
Foreign currency translation adjustment
(1)
2
–
–
Carrying amount at the end of the year
416
420
322
299
Assets held as lessor
Carrying amount at the beginning of the year
1,067
896
78
74
Additions
–
246
–
7
Disposals
(18)
(35)
–
–
Depreciation
(58)
(63)
(4)
(3)
Other transfers ¹
–
29
–
–
Reclassification to assets held for sale ²
(917)
–
–
–
Impairment losses
–
(6)
–
–
Carrying amount at the end of the year
74
1,067
74
78
Total property, plant and equipment
3,676
4,950
3,331
3,549
1 During the year ended 30 June 2023, $29 million of assets were leased out and transferred from equipment to assets under lease as a result of a sublease
arrangement.
2 During the year ended 30 June 2024, the Group reclassified $917 million of structured asset finance leases to assets held for sale.
200
Notes to the Financial Statements
For the year ended 30 June 2024
201
CBA FINANCIAL REPORT
2024 Annual report
6.1
Property, plant and equipment (continued)
ACCOUNTING POLICIES
The Group measures its land and buildings at fair value, based on annual independent market valuations performed during the year.
These fair values fall under the Level 3 category of the fair value hierarchy as defined in AASB 13 Fair Value Measurement. Revaluation
adjustments are reflected in the asset revaluation reserve, except to the extent they reverse a revaluation decrease of the same asset
previously recognised in the Income Statement. Upon disposal, realised amounts in the asset revaluation reserve are transferred to
retained profits.
Other property, plant and equipment assets are stated at cost, including direct and incremental acquisition costs less accumulated
depreciation and impairment if required. Subsequent costs are capitalised where it enhances the asset. Depreciation is calculated using
the straight-line method over the asset’s estimated useful economic life.
The useful lives of major depreciable asset categories are as follows:
Right-of-use assets
Unexpired lease term
Land
Indefinite, not depreciated
Buildings
Up to 30 years
Equipment
3–25 years
Leasehold improvements
Lower of unexpired lease term or useful lives as above
Assets held as lessor:
Leases are entered into to meet the business needs of entities in the Group. Leases are primarily over commercial and retail premises
and plant and equipment. Where the Group is a lessee, all leases will be recognised on the Balance Sheet as a lease liability and right-
of-use asset, unless the underlying asset is of low value or the lease has a term of 12 months or less. Rentals of leases with low value
underlying assets or where the lease term is 12 months or less are recognised over the lease term as operating expenses in the Income
Statement.
Right-of-use assets are initially measured at cost comprising the following:
• the initial amount of the lease liability measured at the present value of the future lease payments;
• any lease payments made at or before the commencement date less any lease incentives received;
• any initial direct costs; and
• an estimate of the costs to be incurred upon disassembling or restoring the underlying asset to the condition required by the terms of
the lease.
The right-of-use asset is depreciated over the lease term on a straight-line basis within operating expenses in the Income Statement.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is
recognised in the Income Statement if the carrying amount of the right-of-use asset has been fully written down.
Critical accounting judgements and estimates
Judgement has been applied by the Group in assessing which arrangements contain a lease, the period over which the lease exists and
the variability of future cash flows when recognising right-of-use assets.
The Group assesses at each balance sheet date useful lives and residual values and whether there is any objective evidence of
impairment. If an asset’s carrying amount is greater than its recoverable amount, the carrying amount is immediately written down to its
recoverable amount.
In determining the value in use of assets held as lessor, the Group incorporates the cash inflows over the lease term, as well as the
expected selling price on expiry of the lease. Market disruption, lower demand for assets, decline in asset prices as well as credit events
specific to individual lessees can result in a reduction of the asset’s recoverable values.
201
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
202
6.2
Intangible assets
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Goodwill
Purchased goodwill at cost
5,285
5,295
2,501
2,501
Closing balance
5,285
5,295
2,501
2,501
Computer software costs
Cost
4,972
4,430
4,111
3,551
Accumulated amortisation
(2,843)
(2,518)
(2,217)
(1,898)
Closing balance
2,129
1,912
1,894
1,653
Brand names ¹
Cost
186
186
186
186
Closing balance
186
186
186
186
Total intangible assets
7,600
7,393
4,581
4,340
1 Brand names include the value of royalty costs foregone by the Group through acquiring the Bankwest brand name. The royalty costs that would have been incurred
by an entity using the Bankwest brand name are based on an annual percentage of income generated by Bankwest. The Bankwest brand name has an indefinite
useful life, as there is no foreseeable limit to the period over which the brand name is expected to generate cash flows. The brand name is not subject to
amortisation, but requires annual impairment testing. No impairment was recognised during the year.
Impairment tests for goodwill and intangible assets with indefinite lives
To assess whether goodwill and other assets with indefinite useful lives are impaired, the carrying amount of a cash-generating unit or a
group of cash-generating units are compared to the recoverable amount. The recoverable amount is determined based on fair value
less cost to sell, primarily using an earnings multiple applicable to that type of business. The category of this fair value is Level 3 as
defined in AASB 13 Fair Value Measurement.
Earnings multiples relating to the Group’s banking cash-generating units are sourced from publicly available data associated with
Australian businesses displaying similar characteristics to those cash-generating units, and are applied to current earnings. The key
assumption is the price-earnings (P/E) multiple observed for these businesses, which for the banking businesses were in the range of
14.3x-15.0x (30 June 2023: 11.1x-12.4x).
Goodwill allocation to cash-generating units
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Retail Banking Services
3,763
3,763
2,002
2,002
Business Banking
1,241
1,241
499
499
New Zealand
258
259
–
–
Corporate Centre and Other
23
32
–
–
Total
5,285
5,295
2,501
2,501
202
Notes to the Financial Statements
For the year ended 30 June 2024
203
CBA FINANCIAL REPORT
2024 Annual report
6.2
Intangible assets (continued)
Reconciliation of the carrying amounts of Intangible assets is set out below:
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Goodwill
Opening balance
5,295
5,295
2,501
2,504
Additions
5
–
–
–
Reclassification to assets held for sale
(13)
(5)
–
(3)
Foreign exchange and other adjustments
(2)
5
–
–
Closing balance
5,285
5,295
2,501
2,501
Computer software costs
Opening balance
1,912
1,409
1,653
1,191
Additions ¹
932
898
826
770
Reclassification to assets held for sale
(30)
–
–
–
Amortisation and impairment
(685)
(395)
(585)
(308)
Closing balance
2,129
1,912
1,894
1,653
Brand names
Opening balance
186
186
186
186
Closing balance
186
186
186
186
Other intangibles
Opening balance
–
9
–
2
Disposals/other adjustments
–
(9)
–
(2)
Closing balance
–
–
–
–
Total intangible assets
7,600
7,393
4,581
4,340
1 Primarily relates to internal software development costs.
203
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
204
6.2
Intangible assets (continued)
ACCOUNTING POLICIES
Intangible assets are identifiable non-monetary assets without physical substance. They are recognised only if it is probable the asset
will generate future benefits for the Group. Those assets with an indefinite useful life are tested for impairment annually. All intangible
assets must be tested for impairment when there is an indication that its carrying amount may be greater than its recoverable amount.
Goodwill
Goodwill arises on the acquisition of a business and represents the excess of the consideration paid over the fair value of the net assets
and liabilities acquired. Goodwill is tested for impairment annually through allocation to a group of cash-generating units (CGUs). The
CGUs’ recoverable amount is then compared to the carrying amount of the CGUs including goodwill and an impairment is recognised
for any excess carrying value.
Computer software costs
Certain internal and external costs directly incurred in acquiring and developing software are capitalised and amortised over the
estimated useful life on a straight-line basis. The majority of software projects are amortised over three to five years. Software
maintenance is expensed as incurred.
SaaS arrangements are service contracts providing the Group with the right to access the provider’s application software over the
contract period. Costs incurred to configure or customise, and the ongoing fees to obtain access to the provider's application software,
are generally recognised as operating expenses when the services are received. Costs incurred for the development of software code
that enhances, modifies or creates additional capability to existing on-premise systems and meets the recognition criteria for an
intangible asset are capitalised and amortised over their estimated useful life on a straight-line basis.
Brand names
Brand names include the Bankwest brand name acquired in a business combination and initially recognised at fair value. The Bankwest
brand name has an indefinite useful life as there is no foreseeable limit to the period over which it is expected to generate cash flows.
Critical accounting judgements and estimates
Goodwill is allocated to CGUs whose recoverable amount is calculated for the purpose of impairment testing. The recoverable amount
calculation relies primarily on publicly available earnings multiples, which are disclosed on page 202.
204
Notes to the Financial Statements
For the year ended 30 June 2024
205
CBA FINANCIAL REPORT
2024 Annual report
6.3
Other assets
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
Note
$M
$M
$M
$M
Accrued interest receivable
4,446
3,811
4,523
3,817
Accrued fees and reimbursements receivable
361
359
283
285
Securities sold not delivered
3,427
1,422
3,048
1,063
Intragroup current tax receivable
–
–
93
190
Current tax assets
21
8
21
6
Prepayments
629
545
538
472
Defined benefit superannuation plan surplus
10.2
436
648
436
648
Other ¹
912
589
667
318
Total other assets
10,232
7,382
9,609
6,799
1 As at 30 June 2024, other assets include $249 million of proceeds receivable in relation to divestments of businesses (30 June 2023: $231 million).
Except for the defined benefits superannuation plan surplus, the majority of the above amounts are expected to be recovered within 12
months of the balance sheet date.
ACCOUNTING POLICIES
Other assets include interest and fee receivables, current tax assets, prepayments, receivables on unsettled trades and the surplus
within defined benefit plans. Interest receivables are recognised on an accruals basis. Fees and reimbursements receivable are
recognised once the service is provided. Trade date accounted securities sold not delivered, consistent with the Group’s policy for all
financial assets measured at fair value through profit or loss or at fair value through other comprehensive income, are recognised
between trade execution and final settlement. The remaining other assets are recognised on an accrual or service performed basis and
amortised over the period in which the economic benefits from these assets are received. Further defined benefit plan details are
provided in Note 10.2.
205
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
206
7
Our liabilities
OVERVIEW
Other liabilities include provisions, interest payable, fees and bills payable and unsettled trade liabilities. Provisions principally cover
annual leave and long service leave employee entitlements, customer remediation, compliance and regulation programs, litigation and
restructuring. It also includes provisions for impairment losses on financial guarantees and other off balance sheet instruments issued
by the Group.
Certain provisions involve significant judgement to determine the likely outcome of events as well as a reliable estimate of the outflows.
Where future events are uncertain and where the outflow cannot be reliably determined, these are disclosed as contingent liabilities.
Contingent liabilities are not recognised on the Group’s Balance Sheet but are disclosed in Note 12.1 Contingent liabilities, and in Note
7.1, in respect of litigation, investigations and reviews.
7.1
Provisions
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
Note
$M
$M
$M
$M
Employee entitlements
1,112
1,077
991
962
Customer remediation
213
346
157
311
Dividends
8.4
183
191
183
191
Compliance and regulation
12
98
4
84
Divestments and restructuring
959
844
949
836
Off balance sheet instruments
223
159
203
154
Other
206
298
194
280
Total provisions
2,908
3,013
2,681
2,818
Maturity distribution of provisions
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Less than twelve months
2,423
2,621
2,213
2,454
More than twelve months
485
392
468
364
Total provisions
2,908
3,013
2,681
2,818
206
Notes to the Financial Statements
For the year ended 30 June 2024
207
CBA FINANCIAL REPORT
2024 Annual report
7.1
Provisions (continued)
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
Reconciliation
$M
$M
$M
$M
Customer remediation:
Opening balance
346
1,068
311
1,020
Additional provisions
179
404
156
403
Amounts utilised during the year
(312)
(1,106)
(310)
(1,092)
Release of provisions
–
(20)
–
(20)
Closing balance
213
346
157
311
Compliance and regulation:
Opening balance
98
99
84
55
Additional provisions
–
77
–
77
Amounts utilised during the year
(72)
(75)
(66)
(45)
Release of provisions
(14)
(3)
(14)
(3)
Closing balance
12
98
4
84
Divestments and restructuring:
Opening balance
844
920
836
917
Additional provisions
372
178
361
168
Amounts utilised during the year
(257)
(254)
(248)
(249)
Closing balance
959
844
949
836
Off balance sheet instruments:
Opening balance
159
117
154
108
Additional provisions
64
42
49
46
Closing balance
223
159
203
154
Other:
Opening balance
298
228
280
197
Additional provisions
43
105
43
103
Amounts utilised during the year
(79)
(35)
(75)
(20)
Release of provisions
(56)
–
(54)
–
Closing balance
206
298
194
280
ACCOUNTING POLICIES
Provisions are recognised for present obligations arising from past events where a payment to settle the obligation is probable and can
be reliably estimated. Where the effect of the time value of money is material, the amount of the provision is measured as the present
value of expenditures required to settle the obligation, based on a market observable rate. Where a payment to settle an obligation is
not probable or cannot be reliably estimated, no provision is recognised. Such obligations are disclosed as contingent liabilities.
207
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
208
7.1
Provisions (continued)
Provisions for employee entitlements (such as long service leave, annual leave and other employee benefits)
This provision is calculated based on expected payments. Where the payments are expected to be more than one year in the future, it
factors in the expected period of service by employees, as well as salary increases. These future obligations are discounted using a
market observable rate.
Customer remediation
This provision covers customer remediation costs and related program costs.
Dividends
This provision relates to dividends for prior periods which have not been settled at the balance sheet date.
Compliance and regulation
This provision relates to litigation, project and other administrative costs associated with certain compliance and regulatory programs of
the Group.
Divestments and restructuring
This provision includes expenses arising from changes in the scope of the Group’s business relating primarily to divestment transactions
including related warranties and indemnities. The provision includes costs, which are both necessarily entailed by the divestment and
are not associated with the ongoing activities of the Group. A provision for restructuring costs is only recognised when the Group has a
detailed formal restructuring plan and the restructuring has either commenced or has been publicly announced.
Other provisions
Other provisions include self-insurance provisions, make-good provisions in relation to property leases, and provisions for certain other
costs.
Critical accounting judgements and estimates
Provisions are held in respect of a range of future obligations, some of which involve significant judgement about the likely outcome of
various events and estimated future cash flows.
Customer remediation
Provisions for customer remediation require significant levels of estimation and judgement. The amount raised depends on a number of
different assumptions, such as the number of years impacted, the forecast remediation fund rate and the average cost per case. The
Group is committed to comprehensively and efficiently addressing the full range of remediation issues impacting customers of the
Banking and former Wealth Management businesses. Significant resources have been committed to a comprehensive program of work,
to ensure that issues are identified and addressed.
Aligned Advice remediation
Aligned advisors were not employed by the Group but were representatives authorised to provide financial advice under the licences of
the Group’s subsidiaries, Financial Wisdom Limited (FWL), Count Financial Limited (Count Financial) and Commonwealth Financial
Planning Limited-Pathways (CFP-Pathways). The Group completed the sale of Count Financial to Count Limited (Count) on 1 October
2019, and ceased providing licensee services through CFP-Pathways and FWL in March and June 2020, respectively. The Bank
entered into reimbursement agreements with FWL and CFP-Pathways, and an indemnity deed with Count to cover potential remediation
of past issues including ongoing service fees and commissions, and other remediation matters. For details on the reimbursement
agreements and the indemnity deed, refer to Note 11.2.
During the year ended 30 June 2024, the Group recognised an increase in the provision for Aligned Advice remediation issues and
program costs of $7 million. In addition, the Group paid $137 million in customer refunds for ongoing service fees, $63 million in other
remediation matters and utilised $29 million for program costs.
As at 30 June 2024, the Group holds a provision of $40 million (30 June 2023: $262 million). The Group has made all customer refunds
in relation to ongoing service fees remediation, and continues to engage with ASIC in relation to remediation programs.
Banking customer remediation
As at 30 June 2024, the provision held by the Group in relation to Banking customer remediation programs was $173 million (30 June
2023: $84 million). The provision includes an estimate of customer refunds (including interest) relating to business and retail banking
products and the related program costs.
208
Notes to the Financial Statements
For the year ended 30 June 2024
209
CBA FINANCIAL REPORT
2024 Annual report
7.1
Provisions (continued)
Litigation, investigations and reviews
The Group is party to a number of legal proceedings, and the subject of various investigations and reviews. Provisions have been raised
in accordance with the principles outlined in the accounting policy section of this note.
Litigation
The main litigated claims against the Group as at 30 June 2024 are summarised below.
Shareholder class actions
In October 2017 and June 2018, two separate shareholder class action proceedings were filed against CBA in the Federal Court of
Australia, alleging breaches of CBA’s continuous disclosure obligations and misleading and deceptive conduct in relation to the subject
matter of the civil penalty proceedings brought against CBA by the Australian Transaction Reports and Analysis Centre (AUSTRAC).
The AUSTRAC proceedings concerned contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth)
(AML/CTF Act).
The resolution of the AUSTRAC civil penalty proceedings was approved by the Federal Court on 20 June 2018 with CBA paying a
penalty of $700 million and legal costs. It was alleged in the class actions that CBA shareholders who acquired an interest in CBA
shares between 16 June 2014 and 3 August 2017 suffered losses as a result of the alleged conduct. The two class actions were being
case managed together, with a single harmonised statement of claim. On 10 May 2024, the Federal Court handed down judgment in
CBA’s favour and on 28 May 2024 orders were made dismissing both class actions. The Applicants filed an appeal from the judgment
on 25 June 2024. CBA is defending the appeal. It is currently not possible to determine the ultimate impact of this claim, if any, on the
Group.
Superannuation class actions
The Group is also defending three class actions in relation to superannuation products.
On 9 October 2018, a class action was filed against Colonial First State Investments Limited (CFSIL) and CBA in the Federal Court of
Australia. The claim initially related to investment in cash and deposit options (which are cash and deposit products provided by CBA) in
the Colonial First State First Choice Superannuation Trust (FirstChoice Fund) and Commonwealth Essential Super and later expanded
to join Avanteos Investments Limited (AIL) as a party in respect of claims regarding the FirstWrap Pooled Cash Account.
The main claims are that members who invested in these cash and deposit options received lower interest rates than they could have
received had CFSIL/AIL offered similar products made available in the market by another bank with comparable risk and that CFSIL/AIL
retained the margin that arises through the internal transfer pricing process in respect of deposits made with CBA, for their own benefit.
It is claimed CFSIL/AIL breached their duties as a trustee of the funds, CFSIL breached its duties as a Responsible Entity of the
underlying managed investment schemes and that CBA was involved in CFSIL/AIL’s breaches. CBA, CFSIL and AIL deny the
allegations and are defending the proceedings.
On 18 October 2019, a second class action was commenced against CFSIL in the Federal Court of Australia. The claim related to
certain fees charged to members of the FirstChoice Fund. It alleged that CFSIL breached its duties as trustee and acted unconscionably
because it failed, between 2013 and 2019, to take steps to avoid the payment of grandfathered commissions to financial advisers, which
would have resulted in a reduction of the fees paid by members in respect of whom those commissions were paid. CFSIL denied the
allegations and defended the proceedings. Following a mediation in June 2023, a settlement was reached with no admissions as to
liability. On 5 August 2024, the Court approved the settlement.
On 22 January 2020, a further class action was filed against CFSIL and The Colonial Mutual Life Assurance Society Limited (CMLA) in
the Federal Court of Australia. On 22 October 2021, AIA Australia Limited (AIAA), who from 1 April 2021 was liable for and assumed
certain liabilities of CMLA under a life insurance scheme pursuant to Part 9 of the Life Insurance Act 1995 (Cth) (Part 9 Scheme), was
joined as a third respondent to the class action. The class action alleges that CFSIL did not act in the best interests of members and
breached its trustee duties when taking out group insurance policies obtained from CMLA. The key allegation is that CFSIL entered into
and maintained insurance policies with CMLA on terms that were less favourable to members than would have reasonably been
available in the market. It is alleged that CMLA was knowingly involved in CFSIL’s contraventions as trustee and profited from those
contraventions. CFSIL, CMLA and AIAA deny the allegations and are defending the proceedings. A mediation took place in December
2023 which did not result in an agreement being reached, and it is anticipated a further mediation will take place in December 2024. The
class action has been provisionally listed for a three week trial commencing 4 August 2025.
On 1 December 2021, the Group completed the sale of a 55% interest in Colonial First State (CFS) to KKR. CBA has assumed carriage
of the superannuation class actions proceedings on CFSIL’s and AIL’s behalf subject to the terms of a conduct indemnity deed between
CBA, CFSIL and AIL. The Group has provided for certain legal and other costs associated with its obligations under the indemnity deed.
Advice class actions
On 21 August 2020, a class action was filed in the Federal Court of Australia against Commonwealth Financial Planning Limited (CFP),
FWL and CMLA. The claim relates to certain CommInsure (CMLA) life insurance policies recommended by financial advisers appointed
by CFP and FWL during the period from 21 August 2014 to 21 August 2020. On 16 November 2021, AIAA (who from 1 April 2021 was
liable for and assumed certain liabilities of CMLA under the Part 9 Scheme) was joined as a fourth respondent to the class action. The
key allegations include that CFP and FWL or their financial advisers breached their fiduciary duties to their clients, breached their duty
to act in the best interest of their clients, and had prioritised their own interests (and the interests of CFP, FWL and CMLA) over the
interest of their clients, in recommending certain CMLA life insurance policies in preference to substantially equivalent or better policies
available at lower premiums from third party insurers. It is also alleged that CMLA knew the material facts giving rise to the breaches of
fiduciary duty. CFP, FWL, CMLA and AIAA deny the allegations and are defending the proceedings. It is currently not possible to
determine the ultimate impact of this claim, if any, on the Group.
209
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
210
7.1
Provisions (continued)
On 24 August 2020 a class action was commenced against Count Financial in the Federal Court of Australia. The proceeding relates to
commissions paid to Count Financial and its authorised representative financial advisers in respect of financial products (including
insurance) and certain obligations of its financial advisers to provide ongoing advice in the period from 21 August 2014 to 21 August
2020. The claim also includes allegations (related to the receipt of commissions) that Count Financial engaged in misleading or
deceptive conduct, and that Count Financial and its authorised representatives breached fiduciary duties owed to the applicant and
group members. The claim seeks compensation and damages from Count Financial, including any profits resulting from the alleged
contraventions. A pre-trial mediation did not resolve the class action and the matter proceeded to a 3 week initial trial in March 2024.
Judgment is reserved.
Count Financial was a wholly owned subsidiary of CBA until 1 October 2019, when it was acquired by Count. CBA has assumed the
conduct of the defence in this matter on Count Financial’s behalf. Count Financial denies the allegations made against it and defended
the proceedings. The Group has provided for certain legal and other costs associated with any indemnity obligations.
Consumer credit insurance (CCI) class action
On 10 June 2020, a class action was commenced against CBA and CMLA in the Federal Court of Australia. The claim related to
consumer credit insurance for credit cards and personal loans that was sold between 1 January 2010 and 7 March 2018. On 1 April
2022, AIAA (who from 1 April 2021 was liable for and assumed certain liabilities of CMLA under the Part 9 Scheme) was joined as a
third respondent to the class action. The class action alleged that CBA and CMLA engaged in unconscionable and misleading or
deceptive conduct, failed to act in the best interests of customers and provided them with inappropriate advice. In particular, it was
alleged that some customers were excluded from claiming certain benefits under the policies and the insurance was therefore
unsuitable or of no value. Allegations were also made in relation to the manner in which the insurance was sold. CBA, CMLA and AIAA
denied the allegations.
On 18 October 2022, the parties attended a Court ordered mediation following which they entered into a settlement agreement to
resolve the proceedings. The settlement was made without admission of liability. On 15 September 2023, the Court approved the
settlement. The Court has ordered that the case be dismissed once the settlement distribution process has been completed.
ASB class action
Proceedings were served on CBA subsidiary ASB Bank Limited (ASB) on 29 September 2021 by plaintiffs seeking to bring a
representative (class action) proceeding against ASB in the High Court of New Zealand. These proceedings relate to ASB’s compliance
with parts of the Credit Contracts and Consumer Finance Act 2003 (NZ) (CCCFA) which requires a variation disclosure to be issued
when customers and ASB make agreed changes to loan agreements captured under the CCCFA.
On 23 and 24 April 2024, the New Zealand Court of Appeal heard ASB’s appeal from an earlier High Court decision permitting the
plaintiffs to pursue their claims as an opt-out representative proceeding on behalf of a class. On 19 July 2024, the Court of Appeal
confirmed the earlier Court’s decision to allow the plaintiffs to bring the action against ASB as an opt-out representative proceeding.
The parties have until 16 August 2024 to apply to the Supreme Court of New Zealand for permission to appeal against the Court of
Appeal’s decision.
The plaintiffs' proposed class definition covers customers who had a home or personal loan with ASB between 6 June 2015 and 18
June 2019 covered by the CCCFA and who were not provided with compliant variation disclosure. Given this definition and the fact that
issues raised in the claim have not been determined by the Courts before, the size of the proposed class is unknown. However, the
proposed class and the allegations made in the proceedings would potentially cover hundreds of thousands of loans.
In their claim, the plaintiffs argue that ASB is not entitled to retain any interest or fees paid by any class member for the period during
which it is alleged that ASB did not provide, and has not provided, compliant variation disclosure under the CCCFA. ASB denies that the
relief sought by the plaintiffs is available to them and is vigorously defending the proceedings.
It is not possible to determine the ultimate impact of this claim, if any, on the Group.
Regulatory enforcement proceedings
Fair Work Ombudsman (FWO) proceedings
In October 2021, the FWO commenced civil penalty proceedings in the Federal Court of Australia against CBA and Commonwealth
Securities Limited (CommSec), alleging contraventions of the Fair Work Act 2009 (Cth) (Fair Work Act), and of the Group’s 2014 and
2016 enterprise agreements. The proceedings followed an investigation by the FWO of the Group’s employee entitlement review (EER).
CBA self-disclosed these matters in the EER to the FWO.
CBA and CommSec cooperated fully with the FWO and agreed a statement of agreed facts and admissions with the FWO. A hearing to
determine penalty was held in September 2023. On 15 February 2024, the Federal Court handed down judgment and ordered CBA to
pay a penalty of $7.31 million and CommSec to pay a penalty of $3.03 million. The penalties have been paid.
CBA’s broad remediation review of employee entitlements for current and former employees is complete.
Long Service Leave (LSL) proceedings
In August 2022, the Wage Inspectorate Victoria commenced criminal proceedings against each of CommSec and BWA Group Services
Pty Ltd (BWA) in the Magistrates’ Court of Victoria. The proceedings relate to alleged underpayments of approximately $60,000 in LSL
entitlements for 17 former employees of those entities (8 employees of CommSec and 9 employees of BWA). LSL underpayments are
included in the Group’s EER described above.
A Plea Hearing was held on 29 July 2024 in the Magistrates’ Court of Victoria. The Court imposed a penalty of $18,000 for CommSec
and $18,000 for BWA. No conviction was recorded for either entity. The Court also made an order for the Wage Inspectorate Victoria’s
costs to be paid by CommSec and BWA, fixed at $12,000, as agreed by the parties.
210
Notes to the Financial Statements
For the year ended 30 June 2024
211
CBA FINANCIAL REPORT
2024 Annual report
7.1
Provisions (continued)
Ongoing regulatory investigations and reviews
The Group undertakes ongoing compliance activities, including breach reporting, reviews of products, advice, conduct and services
provided to customers, as well as interest, fees and premiums charged. Some of these activities have resulted in remediation programs
and where required the Group consults with the relevant regulator and other bodies on the proposed remediation action.
Provisions have been recognised by the Group where the criteria outlined in the accounting policy section of this note are satisfied.
Contingent liabilities exist with respect to these matters where it is not possible to determine the extent of any obligation to remediate or
the potential liability cannot be reliably estimated.
There are also ongoing matters where regulators or other bodies are investigating whether CBA, ASB or another Group entity has
breached laws, regulatory or other obligations. Where a breach has occurred, or obligations have not been met, regulators or other
bodies may impose, or apply to a Court for, fines and/or other sanctions or may require remediation. These matters include
investigations of a number of issues which were notified to, or identified by, regulators or other bodies.
In addition to possible regulatory actions and reviews, there may also be financial exposure to claims by customers, third parties and
shareholders and this could include further class actions, customer remediation or claims for compensation or other remedies. The
outcomes and total costs associated with such regulatory actions and reviews, and possible claims remain uncertain.
Other regulatory matters
The following matters were significant regulatory investigations and reviews, which have been completed, but have resulted in ongoing
action required by the Group.
Financial crime compliance
As noted above, in 2018 the Group resolved the AUSTRAC proceedings relating to contraventions of anti-money laundering/counter-
terrorism financing (AML/CTF) laws. CBA continues to address the underlying causes of the AML/CTF Act failings that resulted in
AUSTRAC commencing its proceedings.
Recognising the crucial role that the Group plays in fighting financial crime, it continues to invest significantly in its financial crime
disruption capabilities, including in its central AML/CTF Compliance team, its business unit-led risk teams, regulatory and control
operations team and through the Program of Action (now called Financial Crime Domain), with coverage across financial crime
(including AML/CTF, sanctions, anti-bribery and corruption and anti-tax evasion facilitation).
We also continue to invest in people, systems, processes and controls to respond to rapidly evolving regulatory environments,
developments in financial crime and other changes in the landscape in which we operate, such as the increasingly sophisticated use of
technology by criminals targeting the financial system, and the increase of scams, fraud, ransomware and cyber-attacks.
The Group continues to review and remediate a number of known AML/CTF compliance issues. As this work progresses, further
compliance issues may be identified and reported to AUSTRAC or other regulators, and additional enhancements of systems and
processes may be required.
The Group provides updates to AUSTRAC and other regulators on its Anti-Money Laundering and Counter-Terrorism Financing
Program and other financial crime compliance capabilities, related enhancements and remediation activities.
However, there is no assurance that AUSTRAC or other regulators will agree that the Group’s enhancements to its financial crime
compliance capabilities, including through the multi-year Program of Action and Financial Crime Domain, are adequate or will effectively
enhance the Group’s financial crime compliance programs across its business units and the jurisdictions in which it operates. There is
also a risk of undetected failure of internal controls, or the ineffective remediation of compliance issues which could lead to breaches of
AML/CTF, sanctions, anti-bribery and corruption and anti-tax evasion facilitation obligations, resulting in potentially significant monetary
and regulatory penalties.
Although the Group is not currently aware of any enforcement proceeding being commenced by any domestic or foreign regulators in
respect of its financial crime compliance, the Group regularly engages with such regulators, including in respect of compliance issues,
and there can be no assurance that the Group will not be subject to such enforcement proceedings in the future.
Enforceable undertaking to the Office of Australian Information Commissioner (OAIC)
In June 2019, the Australian Information and Privacy Commissioner accepted an EU offered by CBA, which required further
enhancements to the management and retention of customer personal information within CBA and certain subsidiaries. CBA completed
the formal obligations under the EU during the year ended 30 June 2024.
CommSec Compliance Program
As part of the proceedings ASIC commenced against CommSec in October 2022, the Federal Court ordered CommSec to undertake a
compliance program. As required by the program, CommSec has appointed an independent expert to review the adequacy and
effectiveness of its remediation of the issues in the proceedings and their root causes, as well as the adequacy of its systems and
controls. The independent expert has prepared an initial report and CommSec has agreed a remedial action plan with ASIC, to address
the recommendations made in the report. The independent expert will conduct a final review once all the actions from the remedial
action plan have been implemented.
211
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
212
7.1
Provisions (continued)
Enforceable undertaking to the Australian Communications and Media Authority (ACMA)
In connection with breaches of certain provisions of the Spam Act 2003 (Cth) (Spam Act), CBA has paid the ACMA a fine of $3.55
million and on 2 June 2023 entered into an EU with the ACMA. As required by the EU, CBA has appointed an independent consultant to
review its current procedures, policies, training and systems relating to CBA’s compliance with the Spam Act. CBA has provided the
ACMA with its plan to implement the independent consultant’s recommendations, and has committed to providing ongoing compliance
reports to the ACMA and training relevant personnel under the EU. The independent consultant has provided its initial report under the
EU, and will conduct further reviews, as set out in the EU, or as otherwise required. CBA continues to review its compliance with the
Spam Act and it considers that further rectification steps will be required.
Other matters
Exposures to divested businesses
The Group has potential exposures to divested businesses, including through the provision of services, warranties and indemnities.
These exposures may have an adverse impact on the Group’s financial performance and position. The Group has recognised
provisions where payments in relation to the exposures are probable and reliably measurable.
212
Notes to the Financial Statements
For the year ended 30 June 2024
213
CBA FINANCIAL REPORT
2024 Annual report
7.2
Bills payable and other liabilities
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Bills payable
343
399
286
337
Accrued interest payable
7,233
5,382
6,561
4,871
Accrued fees, employee incentives and other items payable ¹
4,353
4,339
4,013
4,029
Securities purchased not delivered
3,064
1,197
2,675
861
Unearned income ²
763
872
723
779
Lease liabilities
2,454
2,728
2,259
2,506
Other
814
661
1,585
1,549
Total bills payable and other liabilities
19,024
15,578
18,102
14,932
1 As at 30 June 2024, accrued fees payable include trail commissions payable of $2,332 million (30 June 2023: $2,375 million).
2 Unearned income includes annual facility fees, commitment fees and upfront fees that are deferred and recognised over the service periods. Of the unearned
income recognised at the beginning of the period, the Group and the Bank recognised $546 million and $541 million, respectively, as income during the year ended
30 June 2024 (30 June 2023: $558 million for the Group and $552 million for the Bank).
ACCOUNTING POLICIES
Bills payable and other liabilities include accrued interest payable, accrued incentives payable, accrued fees payable, lease liabilities
and unearned income. Bills payable and other liabilities are measured at the contractual amount payable. As most payables are short-
term in nature, the contractual amount payable approximates fair value.
Where the Group is a lessee, all leases are recognised on the Balance Sheet as a lease liability and right-of-use asset, unless the
underlying asset is of low value or the lease has a term of 12 months or less. Rentals of leases with low value underlying assets or
where the lease term is 12 months or less are recognised over the lease term as operating expenses in the Income Statement. Lease
liabilities are initially measured at the net present value of fixed and variable contractual lease payments as well as expected payments
associated with residual value guarantees/purchase options or early lease termination.
Lease liabilities are remeasured when there is a change in future lease payments. When lease liabilities are remeasured, a
corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recognised in the Income Statement if the
carrying amount of the right-of-use asset has been fully written down. Lease liabilities are measured at amortised cost using the
effective interest method.
Critical accounting judgements and estimates
The measurement of trail commission liabilities is dependent on assumptions about the behavioural life and future outstanding balances
of the underlying transactions. A provision for trail commissions is only recognised to the extent that the Group can reliably estimate the
future cash flows arising from a past event.
213
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
214
8
Our capital, equity and reserves
OVERVIEW
The Group maintains a strong capital position in order to satisfy regulatory capital requirements, provide financial security to its
depositors and creditors and adequate return to its shareholders. The Group’s shareholders’ equity includes issued ordinary shares,
retained earnings and reserves.
This section provides analysis of the Group’s shareholders’ equity including changes during the period.
8.1
Capital adequacy
The Bank is an Authorised Deposit-taking Institution (ADI) regulated by APRA under the authority of the Banking Act 1959. APRA has
set minimum regulatory capital requirements for banks based on the Basel Committee on Banking Supervision (BCBS) guidelines.
The Basel III measurement and monitoring of capital has been effective from 1 January 2013. APRA adopted a more conservative
approach than the minimum standards published by the BCBS and adopted an accelerated timetable for implementation.
These requirements were revised by APRA, effective 1 January 2023, in order to increase the risk sensitivity within the capital
framework, enhance the ability of ADIs to respond flexibly to future stress events, and to improve the comparability of the Australian
framework with international standards.
The requirements define what is acceptable as capital and provide methods of measuring the risks incurred by the Bank.
The regulatory capital requirements are measured for the Extended Licenced Entity Group (known as “Level 1”, comprising the Bank
and APRA approved subsidiaries) and for the Bank and all of its banking subsidiaries, which includes ASB Bank (known as “Level 2”).
All entities which are consolidated for accounting purposes are included within the Group capital adequacy calculations except for:
• insurance subsidiary; and
• certain entities through which securitisation of Group assets are conducted where such entities meet APRA’s capital relief
requirements.
Regulatory capital is divided into Common Equity Tier 1 (CET1), Additional Tier 1 Capital and Tier 2 Capital. CET1 primarily consists of
shareholders’ equity, less goodwill and other prescribed regulatory adjustments. Additional Tier 1 Capital is comprised of certain
securities with features as described in APRA’s prudential standard APS 111 “Capital Adequacy: Measurement of Capital” and other
prescribed regulatory adjustments. Tier 1 Capital is the aggregate of CET1 and Additional Tier 1 Capital. Tier 2 Capital is comprised of
instruments that fall short of necessary conditions to qualify as Additional Tier 1 Capital to APRA and other prescribed regulatory
adjustments. Total Capital is the aggregate of Tier 1 and Tier 2 Capital.
Capital adequacy is measured by means of risk based capital ratios. The capital ratios reflect capital (CET1, Additional Tier 1, Tier 2
and Total Capital) as a percentage of total Risk Weighted Assets (RWA). RWA represents an allocation of risks associated with the
Group’s assets and other related exposures.
The Group has a range of instruments and methodologies available to effectively manage capital. These include ordinary share issues
and buy-backs, dividend and DRP policies, Additional Tier 1 Capital raising and subordinated loan capital issuances that qualify as Tier
2 Capital. All major capital related initiatives require approval of the Board.
The Group’s capital position is monitored on a continuous basis and reported monthly to the Executive Leadership Team, Asset and
Liability Committee and at regular intervals throughout the year to the Board.
The Group’s capital ratios throughout the 2022, 2023 and 2024 financial years were in compliance with both APRA minimum capital
adequacy requirements and the Board approved minimums. The Group is required to inform APRA immediately of any breach or
potential breach of its minimum prudential capital adequacy requirements, including details of remedial action taken or planned to be
taken.
214
Notes to the Financial Statements
For the year ended 30 June 2024
215
CBA FINANCIAL REPORT
2024 Annual report
8.2
Loan capital
Group
Bank
Currency
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
amount (M) Endnotes
$M
$M
$M
$M
Tier 1 loan capital
Undated
PERLS X
AUD 1,365
1
1,364
1,362
1,363
1,360
Undated
PERLS XI
AUD 1,590
1
–
1,588
–
1,587
Undated
PERLS XII
AUD 1,650
1
1,644
1,642
1,643
1,640
Undated
PERLS XIII
AUD 1,180
1
1,176
1,174
1,175
1,172
Undated
PERLS XIV
AUD 1,750
1
1,738
1,736
1,737
1,734
Undated
PERLS XV
AUD 1,777
1
1,760
1,757
1,759
1,755
Undated
PERLS XVI
AUD 1,550
1
1,532
1,531
1,530
1,531
Total Tier 1 loan capital
9,214
10,790
9,207
10,779
Tier 2 loan capital
AUD denominated
2
11,221
9,586
11,221
9,586
USD denominated
3
14,440
12,558
14,440
12,558
JPY denominated
4
603
672
603
672
EUR denominated
5
3,223
1,638
3,223
1,638
Other currencies denominated
6
189
189
189
189
Total Tier 2 loan capital
29,676
24,643
29,676
24,643
Fair value hedge adjustments
(2,952)
(2,835)
(2,952)
(2,835)
Total loan capital ¹
35,938
32,598
35,931
32,587
1 Loan capital includes a $239 million decrease from unrealised movements due to fair value hedge adjustments and foreign exchange gains (30 June 2023: $168
million decrease from unrealised movements due to fair value hedge adjustments partly offset by foreign exchange losses).
As at 30 June 2024 and 2023, there were no securities issued by the Group and the Bank that were contractually due for redemption in
the next 12 months. The Group has the right to call some securities before the contractual maturity.
1. PERLS X, PERLS XI, PERLS XII, PERLS XIII, PERLS XIV, PERLS XV and PERLS XVI
On 6 April 2018, the Bank issued $1,365 million of CommBank PERLS X Capital Notes (PERLS X). On 17 December 2018, the Bank
issued $1,590 million of CommBank PERLS XI Capital Notes (PERLS XI); PERLS XI were fully redeemed on 26 April 2024. On 14
November 2019, the Bank issued $1,650 million of CommBank PERLS XII Capital Notes (PERLS XII). On 1 April 2021, the Bank issued
$1,180 million of CommBank PERLS XIII Capital Notes (PERLS XIII). On 31 March 2022, the Bank issued $1,750 million of CommBank
PERLS XIV Capital Notes (PERLS XIV). On 15 November 2022, the Bank issued $1,777 million of CommBank PERLS XV Capital
Notes (PERLS XV). On 9 June 2023, the Bank issued $1,550 million of CommBank PERLS XVI Capital Notes (PERLS XVI). PERLS X,
PERLS XII, PERLS XIII, PERLS XIV, PERLS XV and PERLS XVI are subordinated, unsecured notes listed on the ASX and are subject
to New South Wales law. They qualify as Additional Tier 1 Capital of the Bank under Basel III as implemented by APRA.
2. AUD denominated Tier 2 loan capital issuances
• $1,400 million subordinated notes issued September 2020, due September 2030;
• $1,500 million subordinated notes issued August 2021, due August 2031;
• $700 million subordinated notes issued April 2022, due April 2032;
• $400 million subordinated notes issued April 2022, due April 2032;
• $300 million subordinated notes issued September 2022, due September 2037;
• $900 million subordinated notes issued November 2022, due November 2032;
• $1,100 million subordinated notes issued November 2022, due November 2032;
• $1,750 million subordinated notes issued March 2023, due March 2038;
• $700 million subordinated notes issued October 2023, due October 2033;
• $550 million subordinated notes issued October 2023, due October 2033;
• $300 million subordinated notes issued December 2023, due December 2043;
• $100 million subordinated Euro Medium Term Notes (EMTN) issued September 2019, due September 2034;
• $280 million subordinated EMTN issued March 2020, due March 2035;
215
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
216
8.2
Loan capital (continued)
• $210 million subordinated EMTN issued May 2020, due May 2035;
• $205 million subordinated EMTN issued August 2020, due August 2040;
• $200 million subordinated EMTN issued August 2020, due August 2050;
• $270 million subordinated EMTN issued December 2020, due December 2040;
• $135 million subordinated EMTN issued August 2021, due August 2041;
• $136 million subordinated EMTN issued September 2021, due September 2041; and
• $85 million subordinated EMTN issued September 2023, due September 2038.
3. USD denominated Tier 2 loan capital issuances
• USD1,250 million subordinated notes issued December 2015 (USD597 million outstanding following the buy-back in March 2021), due
December 2025;
• USD1,250 million subordinated notes issued January 2018, due January 2048;
• USD1,250 million subordinated Medium Term Notes (MTN) issued September 2019, due September 2034;
• USD1,250 million subordinated MTN issued September 2019, due September 2039;
• USD1,500 million subordinated MTN issued March 2021, due March 2031;
• USD1,250 million subordinated MTN issued March 2021, due March 2041;
• USD1,250 million subordinated MTN issued March 2022, due March 2032; and
• USD1,250 million subordinated MTN issued March 2024, due March 2034.
4. JPY denominated Tier 2 loan capital issuances
• JPY14 billion subordinated EMTN issued September 2021, due September 2031;
• JPY30.5 billion subordinated EMTN issued May 2022, due May 2032; and
• JPY20 billion subordinated EMTN issued October 2022, due October 2032.
5. EUR denominated Tier 2 loan capital issuances
• EUR1,000 million subordinated EMTN, issued October 2017, due October 2029; and
• EUR1,000 million subordinated EMTN, issued June 2024, due June 2034.
6. Other currencies denominated Tier 2 loan capital issuances
• HKD400 million subordinated EMTN issued September 2022, due September 2032; and
• HKD580 million subordinated EMTN issued April 2023, due April 2033.
All Tier 2 Capital securities qualify as Tier 2 Capital of the Bank under Basel III as implemented by APRA.
PERLS X, PERLS XII, PERLS XIII, PERLS XIV, PERLS XV, and PERLS XVI, and all Tier 2 Capital securities are subject to Basel III,
under which these securities must be exchanged for a variable number of CBA ordinary shares or written down if a capital trigger event
(PERLS X, PERLS XII, PERLS XIII, PERLS XIV, PERLS XV and PERLS XVI only) or a non-viability trigger event (all securities) occurs.
Any exchange will occur as described in the terms of the applicable instrument documentation.
ACCOUNTING POLICIES
Loan capital consists of instruments issued by the Group, which qualify as regulatory capital under the Prudential Standards set by
APRA. Loan capital is initially measured at fair value and subsequently measured at amortised cost using the effective interest method.
Interest expense incurred is recognised in net interest income.
216
Notes to the Financial Statements
For the year ended 30 June 2024
217
CBA FINANCIAL REPORT
2024 Annual report
8.3
Shareholders’ equity
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Ordinary share capital
Shares on issue:
Opening balance
34,075
36,608
34,073
36,606
Share buy-backs ¹ ²
(282)
(2,533)
(282)
(2,533)
Total shares on issue
33,793
34,075
33,791
34,073
Less treasury shares:
Opening balance
(162)
(141)
(124)
(115)
Purchase of treasury shares ³
(80)
(101)
(66)
(64)
Sale and vesting of treasury shares ³
84
80
51
55
Total treasury shares
(158)
(162)
(139)
(124)
Closing balance
33,635
33,913
33,652
33,949
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
Number of shares on issue
Shares
Shares
Shares
Shares
Opening balance (excluding treasury shares deduction)
1,676,169,322 1,701,538,406
1,676,169,322 1,701,538,406
Share buy-backs
On-market buy-back ¹ ²
(2,588,964)
(25,369,084)
(2,588,964)
(25,369,084)
Dividend reinvestment plan issues:
2021/2022 Final dividend fully paid ordinary shares $96.44 ⁴
–
–
–
–
2022/2023 Interim dividend fully paid ordinary shares $97.37 ⁴
–
–
–
–
2022/2023 Final dividend fully paid ordinary shares $101.10 ⁴
–
–
–
–
2023/2024 Interim dividend fully paid ordinary shares $117.19 ⁴
–
–
–
–
Closing balance (excluding treasury shares deduction)
1,673,580,358 1,676,169,322 1,673,580,358 1,676,169,322
Less: treasury shares ³
(1,510,328)
(1,649,931)
(1,347,560)
(1,264,801)
Closing balance
1,672,070,030 1,674,519,391 1,672,232,798 1,674,904,521
1 On 15 February 2023, the Group announced its intention to undertake an on-market share buy-back of up to $1 billion of CBA ordinary shares in addition to the
$2 billion announcement on 9 February 2022. During the year ended 30 June 2023, the Group completed the $3 billion on-market buy-backs and bought back a total
of 25,369,084 ordinary shares ($2,532 million) at an average price of $99.81. The Group recognised $1 million in transaction costs in relation to the buy-backs. The
shares bought back were subsequently cancelled.
2 On 9 August 2023, the Group announced its intention to conduct a further on-market share buy-back of up to $1 billion of CBA ordinary shares, with 2,588,964
ordinary shares bought back at an average price of $108.84 ($282 million) during the year ended 30 June 2024. The shares bought back were subsequently
cancelled.
3 Movement in treasury shares includes 758,059 shares acquired at an average price of $105.78 for satisfying the Group’s obligations under various equity settled
share plans (30 June 2023: 981,727 shares acquired at an average price of $103.26). Other than shares purchased as part of the Non-Executive Director fee
sacrifice arrangements disclosed in Note 10.3, shares purchased were not on behalf of or initially allocated to a director.
4 The DRP in respect of the interim 2023/2024, final 2022/2023, interim 2022/2023 and final 2021/2022 dividends were satisfied in full through the on-market purchase
and transfer of 4,092,235 shares at $117.19, 7,183,122 shares at $101.10, 6,115,897 shares at $97.37 and 6,201,070 shares at $96.44, respectively, to participating
shareholders.
Ordinary shares have no par value and the Company does not have a limited amount of share capital.
Ordinary shares entitle holders to receive dividends payable to ordinary shareholders and to participate in the proceeds available to
ordinary shareholders on winding up of the Company in proportion to the number of fully paid ordinary shares held. On a show of hands
every holder of fully paid ordinary shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll one vote for
each share held.
217
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
218
8.3
Shareholders’ equity (continued)
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
Retained profits
$M
$M
$M
$M
Opening balance
40,010
36,826
33,075
30,177
Prior period change ¹
–
305
–
736
Revised opening balance
40,010
37,131
33,075
30,913
Actuarial losses from defined benefit superannuation plans
(168)
(12)
(166)
(12)
Net profit attributable to equity holders of the Bank ¹
9,394
9,998
8,613
9,280
Total available for appropriation
49,236
47,117
41,522
40,181
Transfers from asset revaluation reserve
1
10
1
11
Transfers from investment securities revaluation reserve
5
–
5
–
Transfers from employee compensation reserve
(19)
–
(19)
–
Interim dividend – cash component
(3,119)
(2,950)
(3,119)
(2,950)
Interim dividend – dividend reinvestment plan ²
(481)
(596)
(481)
(596)
Final dividend – cash component
(3,296)
(2,973)
(3,296)
(2,973)
Final dividend – dividend reinvestment plan ²
(727)
(598)
(727)
(598)
Closing balance
41,600
40,010
33,886
33,075
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 The DRP in respect of the interim 2023/2024, final 2022/2023, interim 2022/2023 and final 2021/2022 dividends were satisfied in full through the on-market purchase
and transfer of 4,092,235 shares at $117.19, 7,183,122 shares at $101.10, 6,115,897 shares at $97.37 and 6,201,070 shares at $96.44, respectively, to participating
shareholders.
218
Notes to the Financial Statements
For the year ended 30 June 2024
219
CBA FINANCIAL REPORT
2024 Annual report
8.3
Shareholders’ equity (continued)
Group ¹
Bank ¹
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
Reserves
$M
$M
$M
$M
Asset revaluation reserve
Opening balance
278
269
265
252
Revaluation of properties
20
24
20
29
Transfer to retained profits
(1)
(10)
(1)
(11)
Income tax effect
(5)
(5)
(6)
(5)
Closing balance
292
278
278
265
Foreign currency translation reserve
Opening balance
158
(71)
199
166
Currency translation adjustments of foreign operations
(55)
266
(1)
56
Currency translation of net investment hedge
20
(38)
1
(23)
Income tax effect
–
1
–
–
Closing balance
123
158
199
199
Cash flow hedge reserve
Opening balance
(1,820)
(859)
(1,955)
(1,059)
Gains/(losses) on cash flow hedging instruments:
Recognised in other comprehensive income
905
565
1,480
454
Transferred to Income Statement:
Interest income
3,206
2,214
2,657
1,728
Interest expense
(2,528)
(2,772)
(1,955)
(2,361)
Other operating income
(1,131)
(1,361)
(1,134)
(1,089)
Income tax effect
(142)
393
(315)
372
Closing balance
(1,510)
(1,820)
(1,222)
(1,955)
Employee compensation reserve
Opening balance
99
94
99
94
Current period movement
(1)
5
(1)
5
Transfer to retained profits
19
–
19
–
Closing balance
117
99
117
99
Investment securities revaluation reserve
Opening balance
(1,010)
(351)
(971)
(356)
Transfer to retained profits on sale of equity securities
(5)
–
(5)
–
Net losses on revaluation of investment securities
(318)
(805)
(315)
(752)
Net gains on debt investment securities transferred to Income Statement
on disposal
(15)
(5)
(15)
(5)
Income tax effect
179
151
177
142
Closing balance
(1,169)
(1,010)
(1,129)
(971)
Total reserves
(2,147)
(2,295)
(1,757)
(2,363)
Shareholders' equity attributable to equity holders of the Bank
73,088
71,628
65,781
64,661
Shareholders' equity attributable to non-controlling interests
–
5
–
–
Total Shareholders' equity
73,088
71,633
65,781
64,661
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
219
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
220
8.3
Shareholders’ equity (continued)
ACCOUNTING POLICIES
Shareholders’ equity includes ordinary share capital, retained profits and reserves. Policies for each component are set out below.
Ordinary share capital
Ordinary shares are recognised at the amount paid up per ordinary share, net of directly attributable issue costs. Where the Bank or
entities within the Group purchase shares in the Bank, the consideration paid is deducted from total shareholders’ equity and the shares
are treated as treasury shares until they are subsequently sold, reissued or cancelled. Where such shares are sold or reissued, any
consideration received is included in shareholders’ equity.
Retained profits
Retained profits includes the accumulated profits for the Group including certain amounts recognised directly in retained profits less
dividends paid.
Reserves
Asset revaluation reserve
The asset revaluation reserve is used to record revaluation adjustments on the Group’s property assets. Where an asset is sold or
disposed of, any balance in the reserve in relation to the asset is transferred directly to retained profits.
Foreign currency translation reserve
Exchange differences arising on translation of the Group’s foreign operations are accumulated in foreign currency translation reserve.
Specifically assets and liabilities are translated at the prevailing exchange rate at balance sheet date; revenue and expenses are
translated at the transaction date; and all resulting exchange differences are recognised in the foreign currency translation reserve.
When a foreign operation is disposed of, exchange differences are reclassified to the Income Statement.
Cash flow hedge reserve
The cash flow hedge reserve is used to record fair value gains or losses associated with the effective portion of designated cash flow
hedging instruments. Amounts are reclassified to the Income Statement when the hedged transaction impacts profit or loss.
Employee compensation reserve
Employee compensation reserve is used to recognise the fair value of shares and other equity instruments issued to employees under
the employee share plans and bonus schemes.
Investment securities revaluation reserve
Investment securities revaluation reserve includes changes in the fair value of investment securities measured at fair value through
other comprehensive income. For debt securities, these changes are reclassified to the Income Statement when the asset is
derecognised. For equity securities, these changes are not reclassified to the Income Statement when derecognised.
220
Notes to the Financial Statements
For the year ended 30 June 2024
221
CBA FINANCIAL REPORT
2024 Annual report
8.4
Dividends
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 24
30 Jun 23
Note
$M
$M
$M
$M
$M
Ordinary shares
Interim ordinary dividend (fully franked)
(2024: 215 cents; 2023: 210 cents; 2022: 175 cents)
Interim ordinary dividend paid – cash component
3,119
2,950
2,486
3,119
2,950
Interim ordinary dividend paid – Dividend Reinvestment
Plan ¹
481
596
501
481
596
Total dividend paid
3,600
3,546
2,987
3,600
3,546
Other provision carried
183
191
118
183
191
Dividend proposed and not recognised as a liability (fully
franked) (2024: 250 cents; 2023: 240 cents; 2022: 210
cents) ²
4,184
4,023
3,573
4,184
4,023
Provision for dividends
Opening balance
191
118
114
191
118
Provision made during the year ³
7,623
7,117
6,535
7,623
7,117
Provision used during the year ³
(7,631)
(7,044)
(6,531)
(7,631)
(7,044)
Closing balance
7.1
183
191
118
183
191
1 The DRP in respect of the interim 2023/2024, interim 2022/2023 and interim 2021/2022 dividends were satisfied in full through the on-market purchase and transfer
of 4,092,235 shares at $117.19, 6,115,897 shares at $97.37 and 5,107,902 shares at $97.95, to participating shareholders.
2 The final 2023/2024 dividend will be satisfied by cash disbursements with the DRP anticipated to be satisfied by the on-market purchase of shares. The final
2022/2023 and final 2021/2022 dividends were satisfied by cash disbursement with the DRP satisfied in full through the on-market purchase and transfer of
7,183,122 shares at $101.10 and 6,201,070 shares at $96.44.
3 Provisions made and used during the year ended 30 June 2022 do not include $4,534 million dividend component of the $6 billion off-market share buy-back.
Final dividend
The Directors have determined a fully franked (30%) final dividend of 250 cents per share amounting to $4,184 million. The dividend will
be payable on or around 27 September 2024 to shareholders on the register at 5pm AEST on 22 August 2024. The ex-dividend date is
21 August 2024.
Dividend policy
In determining the dividend, the Board considers a range of factors in accordance with the Bank’s dividend policy including:
• paying cash dividends at sustainable levels;
• targeting a full-year payout ratio of 70-80%; and
• maximising the use of its franking account by paying fully franked dividends.
Australian franking credits
The franking credits available to the Group as at 30 June 2024, after allowing for Australian tax payable in respect of the current and
prior reporting period’s profit, are estimated to be $1,861 million (30 June 2023: $1,928 million).
New Zealand imputation credits
The New Zealand imputation credits available to CBA as at 30 June 2024 are estimated to be NZ$894 million (30 June 2023:
NZ$865 million). This is calculated on the same basis as the Australian franking credits but using the New Zealand current tax liability.
221
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
222
8.4
Dividends (continued)
Dividend history
Half year ended
Cents per
share Payment date
Half year
payout ratio ¹ ²
%
Full year
payout ratio ¹ ²
%
DRP price
$
DRP
participation
rate ³
%
31 December 2021
175
30/03/2022
51.0
–
97.95
16.8
30 June 2022
210
29/09/2022
74.0
61.4
96.44
16.8
31 December 2022
210
30/03/2023
68.6
–
97.37
16.8
30 June 2023
240
28/09/2023
83.4
75.7
101.10
18.1
31 December 2023
215
28/03/2024
75.7
–
117.19
13.4
30 June 2024 ⁴
250
27/09/2024
90.3
82.9
–
–
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 Dividend payout ratio: dividends divided by statutory earnings (earnings are net of dividends on other equity instruments).
3 DRP participation rate: the percentage of total issued share capital participating in the DRP.
4 The dividend will be payable to shareholders on or around 27 September 2024.
ACCOUNTING POLICIES
Dividends represent a distribution of profits that holders of ordinary shares receive from time to time. Dividends determined by the Board
of the Bank are recognised with a corresponding reduction of retained earnings on the dividend payment date. The Board takes into
consideration factors including the Group’s relative capital strength and the Group’s existing dividend payout ratio guidelines in
determining the amount of dividends to be paid.
222
Notes to the Financial Statements
For the year ended 30 June 2024
223
CBA FINANCIAL REPORT
2024 Annual report
9
Risk management
OVERVIEW
The Group is exposed to financial, non-financial and strategic risks through the products and services it offers. The Group manages
these risks through its Risk Management Framework (RMF), which evolves to accommodate changes in the business operating
environment, better risk practices, and regulatory and community expectations. The components of the RMF are illustrated below,
including the governance that enables executive and Board oversight of these risks.
Further details on each of the material risks, and how the Group manages them, are outlined in this note.
CBA Group Board
Group Strategy
Group Risk Management Approach
Group Risk Appetite Statement
Risk & Compliance Committee
Audit Committee
Nominations Committee
People & Remuneration Committee
Executive Leadership Team (ELT)
Strategic Risk
Value destruction or less than
planned value creation due to
changes in the external and
internal operating environment.
BU/SU Leadership
Teams
E&S Committee
Level 1 Risk Types:
• Capability and Culture Risk
• Capital Adequacy Risk
• Environmental and Social (E&S) Risk
• Reputation Risk
Financial Risk Committee (FRC)
BU/SU FRCs
Credit Risk
Losses from
failure of
counter-parties
to pay their
debts to CBA.
Asset and Liability
Committee
(ALCO)
Market Risk
Losses from
unexpected
changes in
market rates
and prices.
Liquidity Risk
Inability to
meet financial
obligations as
they fall due.
Non-Financial
Risk Committee (NFRC)
BU/SU NFRCs
Compliance Risk
Fines or
Sanctions from
non-compliance
with laws and
regulations.
Operational Risk
Losses from
inadequate or
failed internal
processes,
systems or people.
Risk &
Remuneration
Review Committee
(RRRC)
BU/SU RRRCs
Level 1 Risk Types:
• Conduct Risk
• Financial Crime
Compliance Risk
• Privacy Risk
• Regulatory
and Licencing
Obligations Risk
Level 1 Risk Types:
• Accounting and Taxation Risk
• Artificial Intelligence Risk
• Business Disruption Risk
• Cybersecurity Risk
• Data Management Risk
• Fraud and Scams Risk
• Legal Risk
• Model Risk
• People Risk
• Technology Risk
• Third Parties Risk
• Transaction Processing Risk
Macro-
economic
Competition
Technology,
Resilience and
Workforce
Regulatory
Political
Customer
Expectations
Environmental
Societal
Emerging Risks
May impact strategy and includes impacts across one or more strategic, financial or non-financial risk types.
Independent advice & assurance (including internal and external audit)
Risk Accountabilities & Skills
Risk Infrastructure
Risk Policies & Procedures
Risk Governance & Reporting
Financial Risks
Non-Financial Risks
Level 1 Risk Types:
• Non-Traded
Market Risk
• Traded
Market Risk
Level 1 Risk Types:
• Non-Retail
Credit Risk
• Retail Credit Risk
Risk Culture Group Remuneration Policy
223
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
224
9.1
Risk management framework
The RMF comprises the systems, structures, policies, processes and people that identify, measure, evaluate, monitor, report and
control or mitigate both internal and external sources of material risk. It incorporates three key documents:
• The Group’s Business Plan (consisting of the Group’s strategic priorities and the Financial Plan) sets out the approach to implement
the Group’s strategic objectives;
• The Group Risk Appetite Statement (RAS) that establishes the type and degree of risk the Board is prepared to accept and the level
of risk that the Group must operate within whilst executing the Group Strategy; and
• The Group Risk Management Approach (RMA) that sets out the Board and the Executive Leadership Team’s expectations
regarding the Group’s approach to managing risk and the key elements of the RMF that give effect to this approach.
The RMF is underpinned by Risk Framework Enablers that allow us to effectively identify, assess, record, manage and monitor our
material risks.
Risk governance and reporting
The Board operates as the highest level of the Group’s risk governance. The Risk and Compliance Committee oversees the RMF and
helps formulate the Group’s risk appetite for consideration by the Board. In particular it:
• Monitors the Group’s risk profile (including identification of emerging risks); and
• Reviews regular reports from management on the measurement of risk and the adequacy and effectiveness of the Group’s risk
management and internal control systems.
At management level, risk governance is undertaken by a structured hierarchy of personal delegations, management committees and
forums across the Group.
Regular management information is produced which allows financial, strategic and non-financial risk positions to be monitored against
approved risk appetite and policy limits. At Board level, the majority of risk reporting is provided to the Risk and Compliance Committee,
although select matters are reported directly to the Board as required. Controls reporting is provided to the Audit Committee. The Chairs
of the Risk & Compliance and Audit Committee report to the Board following each Committee meeting.
Risk policies and procedures
Risk policies, standards and procedures outline the principles and practices to be used in identifying and assessing material risks and
translate the RAS into our daily business activities.
Risk infrastructure
The RMF is supported by systems and processes that together provide the infrastructure for the management of the Group’s material
risks:
• Risk processes to identify, assess, escalate, monitor and manage risks, obligations, issues and incidents;
• Management information systems to measure and aggregate risks across the Group; and
• Data, risk models and tools, including significant calculators.
Risk accountabilities and skills
The Three Lines of Accountability (3LoA) model organises our accountabilities to ensure risk is well managed, through separation of
roles for managing the Group’s risks, developing risk frameworks and defining the boundaries within which risk is managed, and
providing independent assurance over how effectively risks are being managed. The Risk Stewards (senior leaders in Line 1 or Line 2)
complement the 3LoA model, by providing a view on the aggregated risk profile and adequacy of the risk framework for each of our risk
types, including design of policies, mitigation strategies and the capabilities needed to manage the risk type.
The effective management of our material risks requires appropriate resourcing of skilled employees within each of the Group’s 3LoA. It
is important for all employees to have an awareness of their accountabilities, the RMF, and the role our Values play in helping us
manage risk. This awareness is developed through:
• Communication of the RAS and RMA – Following approval by the Board, the updated RAS and RMA are made available to all
employees;
• Performance and remuneration frameworks designed to drive accountability for managing risks and adopting behaviours that
assist the Group to respond to new and emerging risks and to better support our customers and communities. Each year employees
are assessed on how they met the risk management expectations of their role as part of the annual performance review;
• Group Mandatory Learning modules provide foundational knowledge of the RMF and RMA for all employees;
• Risk Management Capability Framework provides the education, experience and exposure to build risk skills and judgement
effectively within the Group; and
• Induction and ongoing learning supports employees in gaining the knowledge, skills and behaviours required to work effectively
across the Group.
224
Notes to the Financial Statements
For the year ended 30 June 2024
225
CBA FINANCIAL REPORT
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9.1
Risk management framework (continued)
Risk culture and conduct risk
Risk culture reflects the beliefs and behaviours by people within the Group that determine how risks are identified, measured, governed,
and acted upon. Effective risk management requires employees to understand different perspectives and apply appropriate judgement
to mitigate risk and deliver better outcomes for customers and shareholders. The behaviours that guide decision making and good risk
management and are expected of employees by the Board, senior management, customers, communities, shareholders and regulators
are embodied within our Values and our Leadership Principles, reinforced by our RMF Enablers.
In relation to conduct risk, the Group requires behaviours and business practices that are fair to customers, protect the fair and efficient
operation of the market and engender confidence in our products and services. Annually, the Board forms a view of the Group’s risk
culture and identifies desirable changes. Action plans are initiated and monitored to improve and sustain risk culture.
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OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
226
9.1
Risk management framework (continued)
Material risk types
Description
Governing Policies and
Key Management
Committees
Key controls and risk mitigation strategies
Credit risk
Credit risk is the potential for loss arising
from the failure of a counterparty to meet
their contractual obligations to the Group.
The Group is primarily exposed to credit
risk through:
Retail Credit Risk
• Residential mortgage lending; and
• Unsecured retail lending.
Non-Retail Credit Risk
• Commercial lending; and
• Large corporate (institutional) lending and
markets exposures.
Governing Policies:
• Group Credit Risk
Framework
• Group Credit Risk
Policies
• Group Loan Loss
Provisioning Framework
• Group and BU Credit
Risk Standard
Key Management
Committee:
• Financial Risk
Committee
• BU/SU Financial Risk
Committees
• Loan Loss Provisioning
Committee
• Defined credit risk indicators set in the Group RAS;
• Transacting with counterparties that demonstrate the ability
and willingness to service their obligations through
performance of due diligence and appropriate credit quality
assessments;
• Applications assessed by credit decisioning models, with
more complex or higher risk applications referred to credit
authority holders who exercise expert judgement;
• Taking collateral where appropriate;
• Pricing appropriately for the risks we are taking;
• Credit concentration frameworks that set exposure limits to
counterparties, groups of related counterparties, industry
sectors and countries;
• Regular monitoring of credit quality, concentrations, arrears,
policy exceptions and policy breaches;
• Working with impaired counterparties, or those in danger of
becoming so, to help them rehabilitate their financial
positions;
• Holding adequate provisions for defaulted and high risk
counterparties and exposures; and
• Stress testing, both at a counterparty and portfolio level.
Market risk
Market risk is the risk that market rates and
prices will change and have an adverse
effect on the profitability and/or net worth
of the Group.
The Group is primarily exposed to market
risk through:
• Traded Market Risk;
• Non-Traded Market Risk;
• Interest Rate Risk in the Banking Book
(IRRBB);
• Lease Residual Value Risk;
• Structural Foreign Exchange Risk; and
• Non-traded Equity Risk.
Governing Policies:
• Group Market Risk
Policy
• Group Traded Market
Risk Standards
Key Management
Committee:
• Financial Risk
Committee and IB&M
Financial Risk
Committee (Oversight of
Traded Market Risk)
• Asset and Liability
Committee (ALCO)
(Oversight of Non-
Traded Market Risk,
including IRRBB)
• Market Risk Committee
• Defined market risk indicators set in the Group RAS;
• No proprietary trading unrelated to the core principal trading
and within approved business strategy;
• Conservative Market Risk limits with granular concentration
limits at a position level including currency/index, tenor and
product type;
• Pricing appropriately for risk and market depth;
• Back-testing of Value at Risk models against hypothetical
profit and loss;
• Daily monitoring and attribution of traded market risk
exposures including risk sensitivities, Value at Risk and
stress testing;
• Daily monitoring of Value at Risk and stress test measures
for derivative valuation adjustments (XVAs);
• Monthly monitoring of Residual Value Risk exposures
versus limits;
• Managing the Balance Sheet with a view to balancing Net
Interest Income (NII), profit volatility and Market Value;
• Regular monitoring of IRRBB market risk exposures against
limits including risk sensitivities, credit spread risk, Value at
Risk, Net Interest Earnings at Risk and stress testing;
• Appropriate transfer pricing for interest rate risk;
• Regular monitoring of Structural Foreign Exchange Risk
versus limits; and
• Regular monitoring of Group Super and Defined Benefit
Fund net asset position.
226
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Description
Governing Policies and
Key Management
Committees
Key controls and risk mitigation strategies
Liquidity risk
Liquidity risk is the combined risks of not
being able to meet financial obligations as
they fall due (funding liquidity risk), and
that liquidity in financial markets, such as
the market for debt securities, may reduce
significantly (market liquidity risk).
Governing Policies:
• Group Liquidity Policy
Key Management
Committee:
• ALCO
• Stress Testing Steering
Committee
• Defined liquidity Risk Appetite metrics and indicators in the
Group RAS;
• The Annual Funding Strategy (the Group’s wholesale
funding strategy based on a three year funding plan);
• Maintaining a diverse yet stable pool of potential funding
sources across different currencies, geographies, entities
and products;
• Maintaining sufficient liquidity buffers and short-term
funding capacity to withstand periods of disruption in long-
term wholesale funding markets and unanticipated changes
in the balance sheet funding gap;
• Limiting the portion of wholesale funding sourced from
offshore;
• Conservatively managing the mismatch between asset and
liability maturities;
• Maintaining a conservative mix of readily saleable or repo-
eligible liquid assets;
• Daily monitoring of liquidity risk exposures, including
Liquidity Coverage Ratios and Net Stable Funding Ratios;
• Market and idiosyncratic stress test scenarios; and
• The Contingent Funding Plan provides strategies for
addressing liquidity shortfalls in a crisis situation.
9.1
Risk management framework (continued)
Notes to the Financial Statements
For the year ended 30 June 2024
227
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2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
228
Operational risk
Operational risk is the risk of losses from
inadequate or failed internal processes,
systems or people, or from external
events.
The Group is exposed to operational risk
primarily through:
• Accounting and Taxation Risk;
• Artificial Intelligence Risk;
• Business Disruption Risk;
• Cybersecurity Risks;
• Data Management Risk;
• Fraud and Scams Risk (external and
internal);
• Legal Risk;
• Model Risk;
• People Risk (employment practices and
workplace safety);
• Technology Risk (disruptions from
hardware of software failures);
• Third Party Risks; and
• Transaction Processing Risk.
Governing Policies:
• Operational Risk
Management
Framework (ORMF)
• Group Information
Security (IS) Policy
• Group Data
Management Policy
• Group Fraud
Management Policy
• Group Whistleblower
Policy
• Group Model Policy
• Group Policy on
Business Continuity
Management
• Group Protective
Security Policy
• Group IT Service
Support and
Management Policy
• Group Supplier Lifecycle
Policy
• Group Artificial
Intelligence Policy
Key Management
Committee:
• Non-Financial Risk
Committee
• BU/SU Non-Financial
Risk Committees
• Model Risk Governance
Committee (MRGC)
• Supplier Governance
Council
• Technology Controls
Council
• BU/SU Executive
Portfolio Group (EPG)
• Defined operational risk indicators in the Group RAS;
• Implementation of manual and automated controls to
prevent, detect and mitigate the specific operational risks
that the Group is exposed to;
• Regular Risk and Control Self-Assessment (RCSA) to
assess key risks and controls for a BU/SU;
• Routine Controls Assessment Program (CAP) tests to
assess whether controls are designed and operating
effectively to maintain risk exposures within acceptable
levels;
• Incident Management process to identify, assess, record,
report and manage actual operational or compliance events
that have occurred. This data is used to guide management
to strengthen processes and controls;
• Issue Management process to identify, assess, record,
report and manage weaknesses or gaps in controls;
• Risk in Change process to effectively understand and
manage the risks from changes to the business through
projects or initiatives;
• Establishment of Key Risk Indicators to monitor movements
in risk exposures over time;
• Assurance undertaken by Line 2 Risk teams to assess that
operational risks are appropriately identified and managed
across the Group; and
• Risk Steward Guidance provided on key controls and
routine Risk Steward monitoring of RAS and risk reporting.
9.1
Risk management framework (continued)
Description
Governing Policies and
Key Management
Committees
Key controls and risk mitigation strategies
228
Notes to the Financial Statements
For the year ended 30 June 2024
229
CBA FINANCIAL REPORT
2024 Annual report
Compliance risk
Compliance risk is the risk of legal or
regulatory sanctions, material financial
loss, or loss of reputation that the Group
may incur as a result of its failure to
comply with its obligations.
The Group is exposed to compliance risk
primarily through:
• Laws, regulations, rules, licence
conditions, and statements of regulatory
policy;
• Privacy laws and regulations regarding
the collection, handling and protection of
personal information of individuals;
• Financial crime (regulation relating to
Anti-Money Laundering, Counter
Terrorism Financing, Anti-Bribery and
Corruption, Anti-Tax Evasion Facilitation
and Sanctions); and
• Poor conduct (product design and
distribution, market conduct, anti-
competitive practices; and financial
hardship and debt collection).
Governing Policies:
• Group Compliance
Management
Framework (CMF) and
policies
• Group and Business
Unit Compliance
Policies and standards
• Joint AML/CTF Group
Program (Part A /Part B)
• Anti-Bribery &
Corruption Policy
• Anti-Tax Evasion
Facilitation Policy
• Group Economic Trade
Sanctions Policy
• Code of Conduct
• Product Development
and Distribution Policy
• Group Prevention of
Anti-Competitive
Practices Policy
• Group Consumer
Protection Policy
• Group Customer
Complaint Management
Policy
• Group Customer
Remediation Projects
Policy
• Group Securities
Trading Policy
• Group Conflicts
Management Policy
Key Management
Committee:
• Executive Financial
Crime Risk Committee
• Financial Crime Risk
Committee
• Group/BU/SU NFRCs
• Product Governance
Forums
Regulatory & Licencing Obligations (RLO) and Privacy
Risk
• Compliance, including FCC, Privacy and Conduct risk
indicators in the Group RAS;
• Mandatory online Compliance and Privacy training for all
employees;
• Regulatory change management to establish compliant
business practices;
• Maintenance of Obligation Registers;
• RLO and Privacy Risk profiling through the Risk and Control
Self-Assessment Process;
• Group wide minimum standards in key areas;
• Co-operative and transparent relationships with regulators;
and
• Board and management governance and reporting.
Financial Crime Compliance
• Implement AML/CTF Program;
• Pre-employment due diligence on the Group’s employees
and enhanced screening for high risk roles;
• Training and awareness sessions to staff on AML/CTF
obligations including sections highlighting the community
impact of financial crime and the Group’s role to detect,
deter and disrupt money laundering, terrorist financing and
other serious crime;
• Customer on-boarding processes to meet AML/CTF
identification and screening requirements;
• Ongoing customer due diligence to ensure information we
maintain on our customers is accurate;
• Risk assessments on our customers, products and
channels to ensure we understand the money laundering
and terrorism financing risks;
• Enhanced customer due diligence on higher risk customers;
• Monitoring customer payments, trade and all transactions to
manage the AML/CTF and Sanctions risks identified;
• Undertake
statutory
reporting
requirements
including
International
Funds
Transfer
Instructions,
Threshold
Transaction Reports and Suspicious Matter Reports and
annual compliance reports;
• Controls to prevent corruption of public officials and private
sector individuals by employees, representatives, suppliers
or third party agents, including disclosure and approval of
gifts
and
entertainment,
charitable
donations
and
sponsorships; and
• Controls to prevent the facilitation of tax evasion by
employees, representatives and other third parties who are
Associated
Persons
of
the
Group,
including
risk
assessments (third party, product/channel and enterprise-
wide risk assessment); employee due diligence and
ongoing staff training and awareness.
Conduct Risk
• Code of Conduct, supported by mandatory training for all
staff;
• Ongoing Conduct Risk profiling, including use of the
Conduct Risk Steward Guides and controls taxonomy to
manage and address Conduct Risks;
• Measurement and governance of Conduct Risk exposures
through RAS metrics and NFRC, Board reporting;
• Assurance and monitoring to identify Conduct Risk
exposures and control weaknesses;
• Enhancement of Code of Conduct related policies with
changes in understanding of conduct obligations and
expectations; and
• Consistently applying the Code of Conduct and the ‘Should
We?’ test to deliver the right outcome for our customers.
9.1
Risk management framework (continued)
Description
Governing Policies and
Key Management
Committees
Key controls and risk mitigation strategies
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OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
230
Strategic risk
Strategic risk is the risk of material
stakeholder value destruction or less than
planned value creation due to changes in
external and internal operating
environments.
This Strategic Risk type also includes a
number of sub-risk types that:
• Primarily support or drive strategic
decisions that could impact our
profitability or business model
assumptions;
• Are impacted by, or drive decisions
resulting in impacts across other risk
types; and
• Are managed more routinely through their
own dedicated governance, policies and
procedures, infrastructure and teams.
These risks include:
• Capital Adequacy Risk – Inability to
capitalise on strategic opportunities or
withstand extreme events due to
insufficient or inefficient use of capital;
• Capability and Culture Risk – Inability to
execute effectively on strategy due to
inadequate organisational skills and
capabilities and a misaligned
organisational culture;
• Environmental & Social (E&S) Risk –
The risk of financial losses to the Group,
or damage to the Group’s franchise value
from the impact of environmental and
social issues on the business; or from the
environmental and social impacts
facilitated through the Group’s operations
and financing activities; and
• Reputation Risk – The risk of business
practices, behaviours or events
negatively impacting the Group’s
reputation.
Governing Policies:
• Group Strategic Risk
Management Policy
• Stress Testing Policy
• Risk Adjusted
Performance
Measurement Policy
• Group Remuneration
Policy
• Group Inclusion &
Diversity Policy
• Group Environmental &
Social Policy
• Group Continuous
Disclosure Policy
• Group Public Disclosure
of Prudential Information
Policy
• Group External
Engagement and
Communication Policy
• Group Policy on Publicly
Issued Documents and
Marketing Materials
Key Management
Committee:
• Executive Leadership
Team
• ELT E&S Committee
• Asset and Liability
Committee (ALCO)
• Non-Financial Risk
Committee
• ELT Risk and
Remuneration Review
Committee (RRRC)
• Stress Testing Steering
Committee
Strategic Risk Management Framework
The Strategic Risk Management Framework (SRMF)
provides the overarching framework and governance
mechanisms for the consideration of material strategic risks
that
challenge
the
business
model
and
profitability
assumptions in our strategy.
In particular, the SRMF considers the impact to our strategy
of dynamically evolving material current and emerging risks
arising from changes in areas such as:
• The competitive landscape;
• Emerging technologies;
• Macroeconomic conditions;
• The regulatory and political environment; and
• Changes in social expectations.
The Group assesses, monitors and responds to strategic risk
throughout its processes of:
• Strategy development, approval and review;
• Identifying and monitoring changes and potential changes
to the operating environment; and
• Monitoring execution progress of strategies.
Capital Adequacy Risk
• Capital advice for projects and funding deals;
• Dividend decision and management processes;
• Capital monitoring, reporting and forecasting;
• Internal Capital Adequacy Assessment Process (ICAAP);
• Group, portfolio and risk type stress testing; and
• Ratings agency interactions.
Capability and Culture Risk
• Talent acquisition processes;
• Leadership development initiatives;
• Organisational culture development initiatives;
• Performance and remuneration processes;
• Diversity & Inclusion initiatives;
• Capability development and training.
E&S Risk
• Defined E&S Risk Indicators in the Group RAS;
• Target financed emissions Glidepaths for priority sectors;
• Scenario analyses and stress testing to understand the
physical and transition risks of climate change;
• E&S Risk embedded in the Group and BUs/SUs business
profiles;
• Client and supplier E&S due diligence process;
• Development of new pilot products and services that
support reduced emissions;
• Environmental, Social & Governance (ESG) lending tool
applied to certain lending decisions;
• Corporate Responsibility programs; and
• Supplier Code of Conduct to ensure adherence to CBA’s
E&S standards.
Reputation Risk
• Media management, marketing and branding standards,
processes and protocols;
• Community investment initiatives;
• Government and political affairs protocols; and
• Strategic decisions to address actual or perceived material
reputation risks.
9.1
Risk management framework (continued)
Description
Governing Policies and
Key Management
Committees
Key controls and risk mitigation strategies
230
Notes to the Financial Statements
For the year ended 30 June 2024
231
CBA FINANCIAL REPORT
2024 Annual report
9.2
Credit risk
Credit risk management principles and portfolio standards
The Group has a Credit Risk Management Framework with clearly defined credit policies and standards for the approval and
management of credit risk and specific Industry Credit standards applying to all major lending areas. These set the minimum
requirements for assessing the integrity and ability of borrowers to meet their contractual obligations for repayment, acceptable forms of
collateral and security and the frequency of credit reviews.
The Group’s credit risk framework policies and standards include concentration limits, which are designed to achieve portfolio outcomes
that are consistent with the Group’s risk appetite and risk and return expectations.
Operationally independent credit assurance and hindsight activities are carried out across the Group’s credit portfolio within Business
Units, Risk Management and Group Audit. The Credit Portfolio Assurance, as a part of Group Operational Risk, review credit portfolios
and business unit compliance with credit policies and standards, frameworks, application of credit risk ratings and other key practices on
a regular basis. An independent function within Retail Banking Services Risk Management undertakes assurance activities across Retail
portfolios. Group Audit undertakes regular reviews of Retail and Non-Retail credit risk portfolios, policies and frameworks.
The credit risk portfolio has two major segments:
(i) Retail managed segment
This segment has sub-segments covering housing loans, credit cards, personal loans, and personal overdrafts. It also covers most non-
retail lending where the aggregated credit exposure to a group of related borrowers is less than $1.5 million.
Auto-decisioning is used to approve credit applications for eligible borrowers in this segment. Auto-decisioning uses a scorecard
approach based on a combination of factors, which may include the Group’s historical experience on similar applications, information
from a credit reference bureau, the Group’s existing knowledge of a borrower’s behaviour and updated information provided by the
borrower.
Loan applications that do not meet scorecard auto-decisioning requirements may be referred to a Personal Credit Approval Authority
(PCAA) for manual decisioning.
After loan origination, these portfolios are managed using behavioural scoring systems and a delinquency band approach. This includes
different actions taken when loan repayments are greater than 30 days past due compared to when they are greater than 60 days past
due. Loans past due are reviewed by the relevant Arrears Management or Financial Assistance Team.
(ii) Risk-rated segment
This segment comprises non-retail exposures, including financial institution and sovereign exposures. Each exposure is assigned an
internal Credit Risk-Rating (CRR) based on Probability of Default (PD) and Loss Given Default (LGD).
Either a PD Rating Model, approved PD Rating Method or expert judgement is used to determine the PD rating for customers in this
segment. Expert judgement is used where the complexity of the transaction and/or the borrower is such that it is inappropriate to rely
completely on a statistical model. External ratings may be used for benchmarking in the expert judgement assessment.
The CRR is designed to:
• aid in assessing changes to borrower credit quality;
• influence decisions on approval, management and pricing of individual credit facilities; and
• provide the basis for reporting details of the Group's credit portfolio.
Credit risk-rated exposures are generally reviewed on an individual basis, at least annually, and fall within the following categories:
• “Pass” – these credit facilities qualify for approval of new or increased exposure on normal commercial terms; and
• “Troublesome or Non Performing Assets (TNPAs)” – these credit facilities are not eligible for new or increased exposure, unless it
facilitates rehabilitation to “pass grade” or protects or improves the Group’s position by maximising recovery prospects. Where a
borrower is in default the facility is classified as non-performing. Restructured facilities, where the original contractual arrangements
terms have been modified to non-commercial terms due to the customer’s financial difficulties, are also classified as non-performing.
Default is recorded with one or more of the following:
• the customer is 90 days or more overdue on a scheduled credit repayment; or
• the customer is unlikely to repay their credit obligation to the Group in full without taking action, such as realising on available security.
Credit risk measurement
The measurement of credit risk uses analytical PD rating models to calculate both: (i) Expected, and (ii) Unexpected Loss probabilities
for the credit portfolio. The use of analytical tools is governed by the Model Risk Governance Committee.
(i) Expected loss
Expected loss (EL) is the product of:
• PD;
• Exposure at Default (EAD); and
• LGD.
The PD, expressed as a percentage, is the estimate of the proportion of the population of customers assigned that PD grade that will
default within the next 12 months.
231
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CREATING VALUE
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FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
232
9.2
Credit risk (continued)
(i) Expected loss (continued)
EAD is the estimate of the amount of a facility that will be outstanding in the event of default. Estimates are based on a downturn in
economic conditions. For committed facilities, the estimate is based on the actual amount outstanding, plus the undrawn amount
multiplied by a credit conversion factor (CCF). The CCF represents the potential rate of conversion from undrawn 12 months prior to
default to drawn at default. For committed non-retail facilities, the Group applies supervisory credit conversion factors to the undrawn
amounts, ranging from 0% to 100%.
For uncommitted facilities, the EAD will generally be the drawn balance only. For defaulted facilities, it is the actual amount outstanding
at default. For retail exposures, a modelling approach can be used based on factors including limit usage, arrears and loan type to
segment accounts into homogeneous pools to calculate EAD.
LGD, expressed as a percentage of EAD, is the estimate of a facility likely to be lost in the event of default. LGD is impacted by:
• the level of security cover and the type of collateral held;
• liquidity of and volatility in the value of collateral;
• carrying costs (effectively the costs of providing a facility that is not generating an interest return); and
• realisation costs.
Various factors are considered when calculating PD, EAD and LGD. Considerations include the potential for default by a borrower due
to economic, management, industry, other risks, and the mitigating benefits of any collateral held as security.
(ii) Unexpected loss
In addition to EL, a more stressed loss amount is calculated. This Unexpected Loss estimate directly affects the calculation of regulatory
and internal economic capital requirements. Refer to Note 8.1 for information relating to regulatory capital.
Climate related risk
The Group uses climate scenario analysis to understand its potential exposure to risks arising from climate change. Climate scenario
analysis can be used to estimate the expected credit loss outcomes for our material lending portfolios. Significant model uncertainty
exists within these scenarios which requires an understanding of the limitations of the data and methodologies applied in order to
interpret the climate scenario analysis outcomes.
Climate risk drivers have the potential to significantly reduce customers’ capacity to repay a loan as well as reduce house or other asset
prices within a region, ultimately impacting customers’ probability of default (PD) and loss given default (LGD). These risk drivers
include an increase in frequency and/or severity of acute physical risks, rising sea levels, long-term changes in weather patterns such
as drought, changes in the availability/affordability of general insurance, and changes in unemployment in regions or industries that are
economically dependent on industries impacted by the transition to a low carbon economy. While these risk drivers are important to
measure, monitor and mitigate where possible, the impacts from historic climate events are implicitly reflected in the Group’s PD and
LGD estimates, and a scenario with severe deterioration in house or asset prices and increase in unemployment is already considered
within the Group’s expected credit loss framework. Additionally, the Group notes that under current credible climate scenarios, the most
severe economic impacts are expected to mostly occur beyond the average behavioural life of the Group’s credit exposures.
As a result, the Group has concluded that no adjustments for climate risk are required to provisions for impairment as at 30 June 2024.
Climate change and the measurement thereof is evolving and will develop over time, and this perspective may change in the future. The
Group continues to conduct climate scenario analysis and assess the impact this may have on its business.
Credit risk mitigation, collateral and other credit enhancements
The Group has policies, standards and procedures in place setting out the acceptable collateral for mitigating credit risks. These include
valuation parameters, review frequency and independence of valuation.
The general nature of collateral that may be taken, and the balances held, are summarised below by financial asset classes.
Cash and liquid assets
Collateral is not usually sought on the majority of cash and liquid asset balances as these types of exposures are generally considered
low risk. However, securities purchased under agreement to resell are collateralised by highly liquid debt securities. The collateral
related to agreements to resell has been legally transferred to the Group subject to an agreement to return them for a fixed price.
The Group’s cash and liquid asset balance included $44,580 million (30 June 2023: $104,770 million) deposited with central banks and
is considered to carry less credit risk.
232
Notes to the Financial Statements
For the year ended 30 June 2024
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CBA FINANCIAL REPORT
2024 Annual report
9.2
Credit risk (continued)
Receivables from financial institutions
Collateral is usually not sought on these balances as exposures are generally considered to be of low risk. The exposures are mainly
short-term, to investment grade banks and include derivatives related collateral posted by the Group.
Trading assets at fair value through income statement and investment securities at fair value through OCI
These assets are carried at fair value, which accounts for the credit risk. Investment securities at amortised cost are measured at
amortised cost and presented net of provisions for impairment. Collateral is not generally sought from the issuer or borrower but
collateral may be implicit in the terms of the instrument (such as an asset-backed security).
Other assets at fair value through income statement
These assets are carried at fair value, which accounts for the credit risk.
Derivative assets
The Group’s use of derivative contracts is outlined in Note 5.4. The Group is exposed to counterparty credit risk on derivative contracts.
The counterparty credit risk is affected by the nature of the trades, the counterparty, netting, and collateral arrangements. Counterparty
credit risk is mitigated where possible (typically for financial institution counterparties, but less frequently for corporate or government
counterparties) through netting agreements, to the extent that if an event of default occurs, all amounts with the same counterparty are
terminated and settled on a net basis. The International Swaps and Derivatives Association (ISDA) Master Agreement (or other
derivative agreements) are used by the Group as an agreement for documenting Over-the-Counter (OTC) derivatives.
The fair value of collateral held and the potential effect of offset obtained by applying master netting agreements are disclosed in
Note 9.7.
Due from controlled entities
Collateral is generally not taken on these intergroup balances.
Credit commitments and contingent liabilities
The Group applies fundamentally the same credit risk management policies and standards for off balance sheet exposure as it does for
its on balance sheet exposures. Collateral may be sought depending on the strength of the borrower and the nature of the transaction.
Of the Group’s off balance sheet exposures $116,864 million (30 June 2023: $121,059 million) are secured.
Loans and other receivables
The principal collateral types for loans and receivable balances are:
• mortgages over residential and commercial real estate; and
• charges over business assets such as cash, shares, inventory, fixed assets and accounts receivable.
Collateral security is generally taken except for government, financial institution and corporate borrowers that are often externally rated
and of strong financial standing. Longer term consumer finance, such as housing loans, are generally secured against real estate, while
short-term revolving consumer credit is generally not secured by formal collateral.
The collateral mitigating credit risk of the key lending portfolios is addressed in the table ‘Collateral held against loans and other
receivables’ within this note.
233
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
234
9.2
Credit risk (continued)
Maximum exposure to credit risk by industry/sector and asset class before collateral held or other
credit enhancements
Group
30 Jun 24
Sovereign
Agricul-
ture
Bank and
other
financial
Con-
struction Consumer
Other
comm and
indust.
Other
Total
$M
$M
$M
$M
$M
$M
$M
$M
Australia
Credit risk exposures relating
to on balance sheet assets:
Cash and liquid assets
18,977
–
36,598
–
–
–
–
55,575
Receivables from financial institutions
–
–
3,316
–
–
–
–
3,316
Assets at fair value through income statement:
Trading
16,129
–
2,452
–
–
3,481
–
22,062
Other
–
72
22,951
–
–
6,697
49
29,769
Derivative assets
2,052
79
3,735
19
–
222
–
6,107
Investment securities:
At amortised cost
–
–
1,239
–
–
–
–
1,239
At fair value through other comprehensive
67,931
–
5,081
–
–
–
–
73,012
Assets held for sale
–
–
–
–
–
836
34
870
Loans and other receivables ¹
11,767
18,446
20,169
6,581
609,916
165,455
–
832,334
Other assets
729
67
6,770
3
398
1,169
–
9,136
Total on balance sheet Australia
117,585
18,664
102,311
6,603
610,314
177,860
83
1,033,420
Credit risk exposures relating
to off balance sheet assets:
Financial guarantees
22
5
1,080
209
450
1,394
–
3,160
Performance related contingencies
202
69
1,124
3,102
–
8,549
–
13,046
Commitments to provide credit and other
commitments
977
2,773
8,960
2,080
97,705
43,933
–
156,428
Total Australia
118,786
21,511
113,475
11,994
708,469
231,736
83
1,206,054
Overseas
Credit risk exposures relating
to on balance sheet assets:
Cash and liquid assets
25,603
–
1,902
–
–
–
–
27,505
Receivables from financial institutions
–
–
2,546
–
–
–
–
2,546
Assets at fair value through income statement:
Trading
2,652
–
57
–
–
1,373
–
4,082
Other
1,285
–
21,835
–
–
–
–
23,120
Derivative assets
297
2
7,362
–
–
4,290
–
11,951
Investment securities:
At amortised cost
–
–
–
–
–
–
–
–
At fair value through other comprehensive
18,886
–
2,435
–
–
3
–
21,324
Assets held for sale
–
–
–
–
–
–
–
–
Loans and other receivables ¹
176
10,138
7,531
798
70,730
28,241
–
117,614
Other assets
31
402
620
–
–
43
–
1,096
Total on balance sheet Overseas
48,930
10,542
44,288
798
70,730
33,950
–
209,238
Credit risk exposures relating
to off balance sheet assets:
Financial guarantees
5
2
178
61
20
388
–
654
Performance related contingencies
–
–
12
–
–
592
–
604
Commitments to provide credit and other
commitments
838
814
9,130
210
8,780
9,576
–
29,348
Total Overseas
49,773
11,358
53,608
1,069
79,530
44,506
–
239,844
Total gross credit risk
168,559
32,869
167,083
13,063
787,999
276,242
83
1,445,898
Other ²
–
–
–
–
–
–
19,156
19,156
Total assets
168,559
32,869
167,083
13,063
787,999
276,242
19,239
1,465,054
1 Loans and other receivables are presented gross of provisions for impairment and unearned income in line with Note 3.1.
2 For the purpose of reconciling to the balance sheet, “other” predominantly comprises assets which do not give rise to credit exposure, including property, plant and
equipment, investment in associates and joint ventures, equity investments at fair value through other comprehensive income, intangible assets, deferred tax assets
and other assets.
234
Notes to the Financial Statements
For the year ended 30 June 2024
235
CBA FINANCIAL REPORT
2024 Annual report
9.2
Credit risk (continued)
Group ¹ ²
30 Jun 23
Sovereign
Agri-
culture
Bank and
other
financial
Con-
struction Consumer
Other
comm and
indust.
Other
Total
$M
$M
$M
$M
$M
$M
$M
$M
Australia
Credit risk exposures relating
to on balance sheet assets:
Cash and liquid assets
77,898
–
7,946
–
–
–
–
85,844
Receivables from financial institutions
–
–
2,350
–
–
–
–
2,350
Assets at fair value through income statement:
Trading
11,611
–
1,872
–
–
5,454
–
18,937
Other
1,161
75
21,571
–
–
1,931
220
24,958
Derivative assets
2,478
45
7,330
28
–
33
–
9,914
Investment securities:
At amortised cost
–
–
2,032
–
–
–
–
2,032
At fair value through other comprehensive
income
59,365
–
6,567
–
–
–
–
65,932
Assets held for sale
–
–
–
–
–
1
–
1
Loans and other receivables ³
24,536
15,963
20,698
6,153
596,832
151,812
–
815,994
Other assets
902
50
4,625
1
359
514
–
6,451
Total on balance sheet Australia
177,951
16,133
74,991
6,182
597,191
159,745
220
1,032,413
Credit risk exposures relating
to off balance sheet assets:
Financial guarantees
10
7
1,002
112
450
1,426
–
3,007
Performance related contingencies
175
46
1,351
2,492
–
8,154
–
12,218
Commitments to provide credit and other
commitments
613
2,747
10,004
1,813
96,996
45,557
–
157,730
Total Australia
178,749
18,933
87,348
10,599
694,637
214,882
220
1,205,368
Overseas
Credit risk exposures relating
to on balance sheet assets:
Cash and liquid assets
26,872
–
3,903
–
–
–
–
30,775
Receivables from financial institutions
–
–
3,729
–
–
–
–
3,729
Assets at fair value through income statement:
Trading
3,117
–
69
–
–
376
–
3,562
Other
818
–
19,352
–
–
–
–
20,170
Derivative assets
397
–
7,939
–
–
5,695
–
14,031
Investment securities:
At amortised cost
–
–
–
–
–
–
–
–
At fair value through other comprehensive
income
14,401
–
2,337
–
–
2
–
16,740
Assets held for sale
–
–
–
–
–
4
–
4
Loans and other receivables ³
501
10,186
7,383
805
70,874
27,508
–
117,257
Other assets
14
–
883
1
4
29
–
931
Total on balance sheet Overseas
46,120
10,186
45,595
806
70,878
33,614
–
207,199
Credit risk exposures relating
to off balance sheet assets:
Financial guarantees
8
2
234
65
19
488
–
816
Performance related contingencies
–
–
22
–
–
482
–
504
Commitments to provide credit and other
commitments
628
871
7,333
200
9,718
8,822
–
27,572
Total Overseas
46,756
11,059
53,184
1,071
80,615
43,406
–
236,091
Total gross credit risk
225,505
29,992
140,532
11,670
775,252
258,288
220
1,441,459
Other ⁴
–
–
–
–
–
–
19,980
19,980
Total assets
225,505
29,992
140,532
11,670
775,252
258,288
20,200
1,461,439
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 Comparative information has been restated to conform to presentation in the current period.
3 Loans and other receivables are presented gross of provisions for impairment and unearned income in line with Note 3.1.
4 For the purpose of reconciling to the balance sheet, “other” predominantly comprises assets which do not give rise to credit exposure, including property, plant and
equipment, investment in associates and joint ventures, equity investments at fair value through other comprehensive income, intangible assets, deferred tax assets
and other assets.
235
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
236
9.2
Credit risk (continued)
Large exposures
Concentrations of exposure to any counterparty or counterparty group are controlled by a large credit exposure policy, which defines a
graduated limit framework that restricts credit limits based on the PD Rating and the type of counterparty. All exposures outside the
policy limits require approval by the Executive Credit Authority and are reported to the Board.
The Group has a high quality, well diversified credit portfolio, with 63% of the gross loans and other receivables in domestic mortgage
loans and a further 7% in overseas mortgage loans, primarily in New Zealand. Overseas loans account for 13% of loans and other
receivables.
Excessive risk concentrations to countries and particular industries or sectors are managed through the Country Risk Exposure Policy
and Industry Sector Concentration Policy.
Distribution of financial assets by credit classification
Where a borrower is in default or facility is restructured on non-commercial terms, the financial asset is classified and reported as non-
performing. Provisions for non-performing financial assets are raised where there is objective evidence of non-performance and for an
amount adequate to cover assessed credit related losses. The Group regularly reviews its financial assets and monitors adherence to
contractual terms. Credit risk-rated exposures are assessed, at least at each balance sheet date, to determine whether the financial
asset is non-performing.
Distribution of financial instruments by credit quality
The tables on pages 237 to 244 provide information about the gross carrying amount of the Group’s and the Bank’s loans and other
receivables by credit rating grade and ECL stage.
This segmentation of loans in retail and risk-rated portfolios is based on the benchmarking of a borrower’s internally assessed PD to
S&P Global ratings, reflecting a borrower’s ability to meet their credit obligations. In particular, retail PD pools are aligned to the Group’s
PD grades which are consistent with rating agency views of credit quality segmentation.
Credit Grade 1
S&P Rating Equivalent
Investment
AAA to BBB-
Pass
BB+ to B-
Weak
CCC and below, in default
1 Allocation of loans to credit grades is based on internally assessed long-run PD factors used for regulatory capital purposes. The allocation does not include the
impact of forward-looking scenarios applied in estimating ECL.
236
Notes to the Financial Statements
For the year ended 30 June 2024
237
CBA FINANCIAL REPORT
2024 Annual report
9.2
Credit risk (continued)
Distribution of financial instruments by credit quality
Group
As at 30 June 2024
Stage 1
Performing
Stage 2 ¹ ² ³
Performing
Stage 3
Non-
performing
Total
$M
$M
$M
$M
Loans and other receivables
Credit grade:
Investment
489,281
19,346
–
508,627
Pass
286,201
135,716
–
421,917
Weak
1,018
7,155
9,406
17,579
Gross carrying amount
776,500
162,217
9,406
948,123
Undrawn credit commitments
Credit grade:
Investment
114,371
6,757
–
121,128
Pass
34,331
14,126
–
48,457
Weak
179
483
100
762
Total undrawn credit commitments
148,881
21,366
100
170,347
Total credit exposures
925,381
183,583
9,506
1,118,470
Impairment provision
(1,768)
(2,610)
(1,534)
(5,912)
Provisions to credit exposure, %
0.2
1.4
16.1
0.5
Financial guarantees and other off balance sheet instruments
Credit grade:
Investment
11,434
1,435
–
12,869
Pass
4,318
5,734
–
10,052
Weak
17
708
71
796
Total financial guarantees and other off balance sheet instruments
15,769
7,877
71
23,717
Impairment provision
(27)
(184)
(12)
(223)
Provisions to credit exposure, %
0.2
2.3
16.9
0.9
Total credit exposures
Credit grade:
Investment
615,086
27,538
–
642,624
Pass
324,850
155,576
–
480,426
Weak
1,214
8,346
9,577
19,137
Total credit exposures
941,150
191,460
9,577
1,142,187
Total impairment provision
(1,795)
(2,794)
(1,546)
(6,135)
Provision to credit exposure, %
0.2
1.5
16.1
0.5
1 The assessment of significant increase in credit risk includes the impact of forward looking multiple economic scenarios in addition to adjustments for emerging risk
at an industry, geographic location or a particular portfolio segment level, which are calculated by stressing an exposure’s internal credit rating grade at the reporting
date. This accounts for approximately 64% of Stage 2 credit exposures for the Group as at 30 June 2024.
2 During the year ended 30 June 2024, the Group implemented a number of new models for the unsecured retail portfolios which resulted in a reduction in provisions
and a higher proportion of exposures allocated to Stage 1. The Group’s provisioning coverage ratio for unsecured retail exposures remains prudent relative to
current loss rates, and broadly in line with pre-pandemic levels.
3 During the year ended 30 June 2024, the Group recalibrated the capital model for the large corporate portfolio which resulted in a higher proportion of exposures
allocated to Stage 2 as at 30 June 2024. This change did not have a significant impact on provisioning levels as the Group recognised an increase in provisions for
the expected impact of model recalibration in the prior year.
237
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
238
9.2
Credit risk (continued)
Group
30 June 2024
Stage 1
Performing
Stage 2 ¹
Performing
Stage 3
Non-
performing
Total
$M
$M
$M
$M
Retail secured
Credit grade:
Investment
453,412
6,104
–
459,516
Pass
238,998
41,076
–
280,074
Weak
182
803
6,727
7,712
Total retail secured
692,592
47,983
6,727
747,302
Impairment provision
(994)
(516)
(570)
(2,080)
Provisions to credit exposure, %
0.1
1.1
8.5
0.3
Retail unsecured ²
Credit grade:
Investment
14,944
828
–
15,772
Pass
10,596
1,465
–
12,061
Weak
796
802
231
1,829
Total retail unsecured
26,336
3,095
231
29,662
Impairment provision
(366)
(462)
(157)
(985)
Provisions to credit exposure, %
1.4
14.9
68.0
3.3
Non-Retail ³
Credit grade:
Investment
146,730
20,606
–
167,336
Pass
75,256
113,035
–
188,291
Weak
236
6,741
2,619
9,596
Total non-retail
222,222
140,382
2,619
365,223
Impairment provision
(435)
(1,816)
(819)
(3,070)
Provisions to credit exposure, %
0.2
1.3
31.3
0.8
Total credit exposures
Credit grade:
Investment
615,086
27,538
–
642,624
Pass
324,850
155,576
–
480,426
Weak
1,214
8,346
9,577
19,137
Total credit exposures
941,150
191,460
9,577
1,142,187
Total impairment provision
(1,795)
(2,794)
(1,546)
(6,135)
Provision to credit exposure, %
0.2
1.5
16.1
0.5
1 The assessment of significant increase in credit risk includes the impact of forward looking multiple economic scenarios in addition to adjustments for emerging risk
at an industry, geographic location or a particular portfolio segment level, which are calculated by stressing an exposure’s internal credit rating grade at the reporting
date. This accounts for approximately 64% of Stage 2 credit exposures for the Group as at 30 June 2024.
2 During the year ended 30 June 2024, the Group implemented a number of new models for the unsecured retail portfolios which resulted in a reduction in provisions
and a higher proportion of exposures allocated to Stage 1. The Group’s provisioning coverage ratio for unsecured retail exposures remains prudent relative to
current loss rates, and broadly in line with pre-pandemic levels.
3 During the year ended 30 June 2024, the Group recalibrated the capital model for the large corporate portfolio which resulted in a higher proportion of exposures
allocated to Stage 2 as at 30 June 2024. This change did not have a significant impact on provisioning levels as the Group recognised an increase in provisions for
the expected impact of model recalibration in the prior year.
238
Notes to the Financial Statements
For the year ended 30 June 2024
239
CBA FINANCIAL REPORT
2024 Annual report
9.2
Credit risk (continued)
Group
As at 30 June 2023
Stage 1
Performing
Stage 2 ¹ ²
Performing
Stage 3
Non-
performing
Total
$M
$M
$M
$M
Loans and other receivables
Credit grade:
Investment
475,766
16,786
–
492,552
Pass
286,938
137,230
–
424,168
Weak ³
1,050
6,666
7,437
15,153
Gross carrying amount
763,754
160,682
7,437
931,873
Undrawn credit commitments
Credit grade:
Investment
106,912
6,223
–
113,135
Pass
34,742
14,060
–
48,802
Weak
209
481
173
863
Total undrawn credit commitments
141,863
20,764
173
162,800
Total credit exposures
905,617
181,446
7,610
1,094,673
Impairment provision
(1,684)
(2,764)
(1,343)
(5,791)
Provisions to credit exposure, %
0.2
1.5
17.6
0.5
Financial guarantees and other off balance sheet instruments
Credit grade:
Investment
11,816
1,045
–
12,861
Pass
4,115
5,035
–
9,150
Weak
17
348
167
532
Total financial guarantees and other off balance sheet instruments
15,948
6,428
167
22,543
Impairment provision
(25)
(125)
(9)
(159)
Provisions to credit exposure, %
0.2
1.9
5.4
0.7
Total credit exposures
Credit grade:
Investment
594,494
24,054
–
618,548
Pass
325,795
156,325
–
482,120
Weak
1,276
7,495
7,777
16,548
Total credit exposures
921,565
187,874
7,777
1,117,216
Total impairment provision
(1,709)
(2,889)
(1,352)
(5,950)
Provision to credit exposure, %
0.2
1.5
17.4
0.5
1 The assessment of significant increase in credit risk includes the impact of forward looking multiple economic scenarios in addition to adjustments for emerging risk
at an industry, geographic location or a particular portfolio segment level, which are calculated by stressing an exposure’s internal credit rating grade at the reporting
date. This accounts for approximately 62% of Stage 2 credit exposures for the Group as at 30 June 2023.
2 Following the adoption of APRA’s revised capital framework from 1 January 2023, the Group implemented a number of new models for the domestic home lending
portfolio, including new provisioning models which resulted in a higher proportion of exposures allocated to Stage 2 as at 30 June 2023, closer to industry averages.
These exposures remain performing and well secured resulting in a low likelihood of loss and no significant change in total provisioning levels.
3 During the year ended 30 June 2023, APRA approved a revised residential mortgage PD model, which led to movements in PD bands and a reduction in exposures
in the “weak” category.
239
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
240
9.2
Credit risk (continued)
Group
30 June 2023
Stage 1
Performing
Stage 2 ¹
Performing
Stage 3
Non-
performing
Total
$M
$M
$M
$M
Retail secured ²
Credit grade:
Investment
426,240
6,148
–
432,388
Pass
237,053
52,747
–
289,800
Weak ³
175
878
5,028
6,081
Total retail secured
663,468
59,773
5,028
728,269
Impairment provision
(834)
(601)
(395)
(1,830)
Provisions to credit exposure, %
0.1
1.0
7.9
0.3
Retail unsecured
Credit grade:
Investment
13,026
3,013
–
16,039
Pass
9,528
2,326
–
11,854
Weak
780
857
189
1,826
Total retail unsecured
23,334
6,196
189
29,719
Impairment provision
(431)
(644)
(130)
(1,205)
Provisions to credit exposure, %
1.8
10.4
68.8
4.1
Non-Retail
Credit grade:
Investment
155,228
14,893
–
170,121
Pass
79,214
101,252
–
180,466
Weak
321
5,760
2,560
8,641
Total non-retail
234,763
121,905
2,560
359,228
Impairment provision
(444)
(1,644)
(827)
(2,915)
Provisions to credit exposure, %
0.2
1.3
32.3
0.8
Total credit exposures
Credit grade:
Investment
594,494
24,054
–
618,548
Pass
325,795
156,325
–
482,120
Weak
1,276
7,495
7,777
16,548
Total credit exposures
921,565
187,874
7,777
1,117,216
Total impairment provision
(1,709)
(2,889)
(1,352)
(5,950)
Provision to credit exposure, %
0.2
1.5
17.4
0.5
1 The assessment of significant increase in credit risk includes the impact of forward looking multiple economic scenarios in addition to adjustments for emerging risk
at an industry, geographic location or a particular portfolio segment level, which are calculated by stressing an exposure’s internal credit rating grade at the reporting
date. This accounts for approximately 62% of Stage 2 credit exposures for the Group as at 30 June 2023.
2 Following the adoption of APRA’s revised capital framework from 1 January 2023, the Group implemented a number of new models for the domestic home lending
portfolio, including new provisioning models which resulted in a higher proportion of exposures allocated to Stage 2 as at 30 June 2023, closer to industry averages.
These exposures remain performing and well secured resulting in a low likelihood of loss and no significant change in total provisioning levels.
3 During the year ended 30 June 2023, APRA approved a revised residential mortgage PD model, which led to movements in PD bands and a reduction in exposures
in the “weak” category.
240
Notes to the Financial Statements
For the year ended 30 June 2024
241
CBA FINANCIAL REPORT
2024 Annual report
9.2
Credit risk (continued)
Bank
As at 30 June 2024
Stage 1
Performing
Stage 2 ¹ ² ³
Performing
Stage 3
Non-
performing
Total
$M
$M
$M
$M
Loans and other receivables
Credit grade:
Investment
471,826
17,435
–
489,261
Pass
220,182
114,758
–
334,940
Weak
1,018
6,524
7,602
15,144
Gross carrying amount
693,026
138,717
7,602
839,345
Undrawn credit commitments
Credit grade:
Investment
108,478
6,215
–
114,693
Pass
29,038
12,734
–
41,772
Weak
179
463
68
710
Total undrawn credit commitments
137,695
19,412
68
157,175
Total credit exposures
830,721
158,129
7,670
996,520
Impairment provision
(1,637)
(2,381)
(1,303)
(5,321)
Provisions to credit exposure, %
0.2
1.5
17.0
0.5
Financial guarantees and other off balance sheet instruments
Credit grade:
Investment
11,208
1,420
–
12,628
Pass
4,088
5,511
–
9,599
Weak
17
629
69
715
Total financial guarantees and other off balance sheet instruments
15,313
7,560
69
22,942
Impairment provision
(26)
(165)
(12)
(203)
Provisions to credit exposure, %
0.2
2.2
17.4
0.9
Total credit exposures
Credit grade:
Investment
591,512
25,070
–
616,582
Pass
253,308
133,003
–
386,311
Weak
1,214
7,616
7,739
16,569
Total credit exposures
846,034
165,689
7,739
1,019,462
Total impairment provision
(1,663)
(2,546)
(1,315)
(5,524)
Provision to credit exposure, %
0.2
1.5
17.0
0.5
1 The assessment of significant increase in credit risk includes the impact of forward looking multiple economic scenarios in addition to adjustments for emerging risk
at an industry, geographic location or a particular portfolio segment level, which are calculated by stressing an exposure’s internal credit rating grade at the reporting
date. This accounts for approximately 64% of Stage 2 credit exposures for the Bank as at 30 June 2024.
2 During the year ended 30 June 2024, the Bank implemented a number of new models for the unsecured retail portfolios which resulted in a reduction in provisions
and a higher proportion of exposures allocated to Stage 1. The Bank’s provisioning coverage ratio for unsecured retail exposures remains prudent relative to current
loss rates, and broadly in line with pre-pandemic levels.
3 During the year ended 30 June 2024, the Bank recalibrated the capital model for the large corporate portfolio which resulted in a higher proportion of exposures
allocated to Stage 2 as at 30 June 2024. This change did not have a significant impact on provisioning levels as the Bank recognised an increase in provisions for
the expected impact of model recalibration in the prior year.
241
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
242
9.2
Credit risk (continued)
Bank
30 June 2024
Stage 1
Performing
Stage 2 ¹
Performing
Stage 3
Non-
performing
Total
$M
$M
$M
$M
Retail secured
Credit grade:
Investment
438,399
5,932
–
444,331
Pass
178,537
36,838
–
215,375
Weak
182
803
5,340
6,325
Total retail secured
617,118
43,573
5,340
666,031
Impairment provision
(935)
(476)
(456)
(1,867)
Provisions to credit exposure, %
0.2
1.1
8.5
0.3
Retail unsecured ²
Credit grade:
Investment
14,061
794
–
14,855
Pass
9,092
1,351
–
10,443
Weak
796
788
189
1,773
Total retail unsecured
23,949
2,933
189
27,071
Impairment provision
(346)
(449)
(135)
(930)
Provisions to credit exposure, %
1.4
15.3
71.4
3.4
Non-Retail ³
Credit grade:
Investment
139,052
18,344
–
157,396
Pass
65,679
94,814
–
160,493
Weak
236
6,025
2,210
8,471
Total non-retail
204,967
119,183
2,210
326,360
Impairment provision
(382)
(1,621)
(724)
(2,727)
Provisions to credit exposure, %
0.2
1.4
32.8
0.8
Total credit exposures
Credit grade:
Investment
591,512
25,070
–
616,582
Pass
253,308
133,003
–
386,311
Weak
1,214
7,616
7,739
16,569
Total credit exposures
846,034
165,689
7,739
1,019,462
Total impairment provision
(1,663)
(2,546)
(1,315)
(5,524)
Provision to credit exposure, %
0.2
1.5
17.0
0.5
1 The assessment of significant increase in credit risk includes the impact of forward looking multiple economic scenarios in addition to adjustments for emerging risk
at an industry, geographic location or a particular portfolio segment level, which are calculated by stressing an exposure’s internal credit rating grade at the reporting
date. This accounts for approximately 64% of Stage 2 credit exposures for the Bank as at 30 June 2024.
2 During the year ended 30 June 2024, the Bank implemented a number of new models for the unsecured retail portfolios which resulted in a reduction in provisions
and a higher proportion of exposures allocated to Stage 1. The Bank’s provisioning coverage ratio for unsecured retail exposures remains prudent relative to current
loss rates, and broadly in line with pre-pandemic levels.
3 During the year ended 30 June 2024, the Bank recalibrated the capital model for the large corporate portfolio which resulted in a higher proportion of exposures
allocated to Stage 2 as at 30 June 2024. This change did not have a significant impact on provisioning levels as the Bank recognised an increase in provisions for
the expected impact of model recalibration in the prior year.
242
Notes to the Financial Statements
For the year ended 30 June 2024
243
CBA FINANCIAL REPORT
2024 Annual report
9.2
Credit risk (continued)
Bank
As at 30 June 2023
Stage 1
Performing
Stage 2 ¹ ²
Performing
Stage 3
Non-
performing
Total
$M
$M
$M
$M
Loans and other receivables
Credit grade:
Investment
456,491
15,241
–
471,732
Pass
219,342
117,254
–
336,596
Weak ³
1,050
6,079
5,879
13,008
Gross carrying amount
676,883
138,574
5,879
821,336
Undrawn credit commitments
Credit grade:
Investment
100,685
5,992
–
106,677
Pass
29,652
12,847
–
42,499
Weak
209
468
132
809
Total undrawn credit commitments
130,546
19,307
132
149,985
Total credit exposures
807,429
157,881
6,011
971,321
Impairment provision
(1,517)
(2,523)
(1,156)
(5,196)
Provisions to credit exposure, %
0.2
1.6
19.2
0.5
Financial guarantees and other off balance sheet instruments
Credit grade:
Investment
11,508
1,038
–
12,546
Pass
3,902
4,783
–
8,685
Weak
17
347
62
426
Total financial guarantees and other off balance sheet instruments
15,427
6,168
62
21,657
Impairment provision
(23)
(122)
(9)
(154)
Provisions to credit exposure, %
0.1
2.0
14.5
0.7
Total credit exposures
Credit grade:
Investment
568,684
22,271
–
590,955
Pass
252,896
134,884
–
387,780
Weak
1,276
6,894
6,073
14,243
Total credit exposures
822,856
164,049
6,073
992,978
Total impairment provision
(1,540)
(2,645)
(1,165)
(5,350)
Provision to credit exposure, %
0.2
1.6
19.2
0.5
1 The assessment of significant increase in credit risk includes the impact of forward looking multiple economic scenarios in addition to adjustments for emerging risk
at an industry, geographic location or a particular portfolio segment level, which are calculated by stressing an exposure’s internal credit rating grade at the reporting
date. This accounts for approximately 62% of Stage 2 credit exposures for the Bank as at 30 June 2023.
2 Following the adoption of APRA’s revised capital framework from 1 January 2023, the Group implemented a number of new models for the domestic home lending
portfolio, including new provisioning models which resulted in a higher proportion of exposures allocated to Stage 2 as at 30 June 2023, closer to industry averages.
These exposures remain performing and well secured resulting in a low likelihood of loss and no significant change in total provisioning levels.
3 During the year ended 30 June 2023, APRA approved a revised residential mortgage PD model, which led to movements in PD bands and a reduction in exposures
in the “weak” category.
243
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
244
9.2
Credit risk (continued)
Bank
30 June 2023
Stage 1
Performing
Stage 2 ¹
Performing
Stage 3
Non-
performing
Total
$M
$M
$M
$M
Retail secured ²
Credit grade:
Investment
410,896
5,951
–
416,847
Pass
176,098
48,295
–
224,393
Weak ³
174
864
3,798
4,836
Total retail secured
587,168
55,110
3,798
646,076
Impairment provision
(762)
(565)
(291)
(1,618)
Provisions to credit exposure, %
0.1
1.0
7.7
0.3
Retail unsecured
Credit grade:
Investment
12,148
2,975
–
15,123
Pass
7,985
2,152
–
10,137
Weak
780
843
163
1,786
Total retail unsecured
20,913
5,970
163
27,046
Impairment provision
(406)
(625)
(115)
(1,146)
Provisions to credit exposure, %
1.9
10.5
70.6
4.2
Non-Retail
Credit grade:
Investment
145,640
13,345
–
158,985
Pass
68,813
84,437
–
153,250
Weak
322
5,187
2,112
7,621
Total non-retail
214,775
102,969
2,112
319,856
Impairment provision
(372)
(1,455)
(759)
(2,586)
Provisions to credit exposure, %
0.2
1.4
35.9
0.8
Total credit exposures
Credit grade:
Investment
568,684
22,271
–
590,955
Pass
252,896
134,884
–
387,780
Weak
1,276
6,894
6,073
14,243
Total credit exposures
822,856
164,049
6,073
992,978
Total impairment provision
(1,540)
(2,645)
(1,165)
(5,350)
Provision to credit exposure, %
0.2
1.6
19.2
0.5
1 The assessment of significant increase in credit risk includes the impact of forward looking multiple economic scenarios in addition to adjustments for emerging risk
at an industry, geographic location or a particular portfolio segment level, which are calculated by stressing an exposure’s internal credit rating grade at the reporting
date. This accounts for approximately 62% of Stage 2 credit exposures for the Bank as at 30 June 2023.
2 Following the adoption of APRA’s revised capital framework from 1 January 2023, the Group implemented a number of new models for the domestic home lending
portfolio, including new provisioning models which resulted in a higher proportion of exposures allocated to Stage 2 as at 30 June 2023, closer to industry averages.
These exposures remain performing and well secured resulting in a low likelihood of loss and no significant change in total provisioning levels.
3 During the year ended 30 June 2023, APRA approved a revised residential mortgage PD model, which led to movements in PD bands and a reduction in exposures
in the “weak” category.
244
Notes to the Financial Statements
For the year ended 30 June 2024
245
CBA FINANCIAL REPORT
2024 Annual report
9.2
Credit risk (continued)
Collateral held against loans and other receivables
Group
30 Jun 24
Other
Other
Home loans
consumer
lending
Total ¹
Maximum exposure ($M)
746,376
40,755
348,593
1,135,724
Collateral classification:
Secured (%)
99.3
11.4
51.3
81.8
Partially secured (%)
0.7
–
20.1
6.4
Unsecured (%)
–
88.6
28.6
11.8
1 As at 30 June 2024, total exposures in ECL Stage 3 were $9,577 million. 66% of these exposures were secured, 28% partially secured and 6% unsecured.
Group ¹
30 Jun 23
Other
Other
Home loans
consumer
lending
Total ²
Maximum exposure ($M)
733,395
41,025
344,133
1,118,553
Collateral classification:
Secured (%)
99.2
11.3
49.1
80.8
Partially secured (%)
0.8
–
16.8
5.6
Unsecured (%)
–
88.7
34.1
13.6
1 Comparative information has been restated to conform to presentation in the current period.
2 As at 30 June 2023, total exposures in ECL Stage 3 were $7,777 million. 63% of these exposures were secured, 27% partially secured and 10% unsecured.
Bank
30 Jun 24
Other
Other
Home loans
consumer
lending
Total ¹
Maximum exposure ($M)
662,756
38,111
311,376
1,012,243
Collateral classification:
Secured (%)
99.5
12.1
49.6
81.3
Partially secured (%)
0.5
–
19.7
6.2
Unsecured (%)
–
87.9
30.7
12.5
1 As at 30 June 2024, total exposures in ECL Stage 3 were $7,739 million. 73% of these exposures were secured, 21% partially secured and 6% unsecured.
Bank ¹
30 Jun 23
Other
Other
Home loans
consumer
lending
Total ²
Maximum exposure ($M)
655,485
38,297
305,987
999,769
Collateral classification:
Secured (%)
99.5
17.2
47.0
80.5
Partially secured (%)
0.5
–
16.7
5.3
Unsecured (%)
–
82.8
36.3
14.2
1 Comparative information has been restated to conform to presentation in the current period.
2 As at 30 June 2023, total exposures in ECL Stage 3 were $6,073 million. 70% of these exposures were secured, 20% partially secured and 10% unsecured.
For the purposes of the collateral classification above, home loans are classified as secured when the ratio of exposure to the estimated
value of collateral is 100% or below, and partially secured when the ratio of exposure to the estimated value of collateral is greater than
100%. For other types of exposures, a facility is deemed to be secured when the ratio of exposure to the estimated value of collateral is
less than or equal to 100%. A facility is deemed to be partially secured when the ratio is greater than 100% but does not exceed 250%,
and unsecured when there is no security held (e.g. credit cards, unsecured personal loans, exposures to highly rated corporate entities),
or where the secured loan exposure to the estimated value of collateral exceeds 250%.
245
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
246
9.2
Credit risk (continued)
Collateral held against loans and other receivables (continued)
Home loans
Home loans are generally secured by fixed charges over borrowers’ residential properties. In limited circumstances, collateral in the
form of cash or commercial property may be provided in addition to residential property. With the exception of some relatively small
portfolios, for loans with a Loan to Valuation Ratio (LVR) of higher than 80% either a Low Deposit Premium or margin is levied, or
Lenders Mortgage Insurance (LMI) is taken out to cover the difference between the principal plus interest owing and the net amount
received from selling the collateral post default.
Other consumer
Other consumer category includes credit card and personal loans which are predominantly unsecured, whilst margin lending and some
personal loans are secured.
Other lending
The Group’s main collateral types for other lending consists of secured rights over specified assets of the borrower in the form of:
commercial property; land rights; cash (usually in the form of a charge over a deposit) and other liquid assets (e.g. bonds, shares,
investment funds); guarantees by company Directors; fixed and floating charges over a company’s assets (including debtors, stock and
work in progress); or a charge over assets being financed (e.g. vehicles, equipment). In other instances, a client’s facilities may be
secured by collateral with value less than the carrying amount of the credit exposure. These facilities are deemed partially secured or
unsecured.
246
Notes to the Financial Statements
For the year ended 30 June 2024
247
CBA FINANCIAL REPORT
2024 Annual report
9.3
Market risk
Market risk measurement
The Group uses Value-at-Risk (VaR) as one of the measures of traded and non-traded market risk. VaR measures potential loss using
historically observed market movements and correlation between different markets.
VaR is modelled at a 99.0% confidence level. This means that there is a 99.0% probability that the loss will not exceed the VaR
estimate on any given day.
The VaR measured for traded market risk uses two years of daily movement in market rates. The VaR measure for non-traded banking
book market risk uses six years of daily movement in market rates.
A 10-day holding period is used for trading book positions. A 20-day holding period is used for interest rate risk in the banking book.
VaR is driven by historical observations and is not an estimate of the maximum loss that the Group could experience from an extreme
market event. As a result of this limitation, management also uses stress testing to measure the potential for economic loss at
confidence levels significantly higher than 99.0%. Management then uses these results in decisions to manage the economic impact of
market risk positions.
Average
30 Jun 24 ¹
As at
30 Jun 24
Average
30 Jun 23 ¹
As at
30 Jun 23
Total market risk VaR (10-day 99.0% confidence)
$M
$M
$M
$M
Traded market risk
56.6
37.1
98.2
115.0
Non-traded interest rate risk ²
414.8
426.8
378.2
380.1
1 Average VaR calculated for each 12 month period.
2 The risk of these exposures has been represented in this table using a 10-day holding period. In practice, however, these “non-traded” exposures are managed to a
longer holding period.
Traded market risk
Traded market risk is generated through the Group’s participation in financial markets to service its customers. The Group trades and
distributes interest rate, foreign exchange, debt, equity and commodity products, and provides treasury, capital markets and risk
management services to its customers globally.
The Group maintains access to markets by quoting bid and offer prices with other market makers and carries an inventory of treasury,
capital market and risk management instruments, including a broad range of securities and derivatives.
Average
30 Jun 24 ¹
As at
30 Jun 24
Average
30 Jun 23 ¹ ²
As at
30 Jun 23 ²
Traded market risk VaR (10-day 99.0% confidence)
$M
$M
$M
$M
Interest rate risk ³
28.6
22.5
78.9
80.4
Foreign exchange risk
3.9
5.2
13.5
7.3
Commodities risk
16.0
8.6
31.1
30.1
Credit spread risk
23.3
22.3
18.1
25.8
Volatility risk
6.0
4.5
3.3
3.5
Diversification benefit
(43.1)
(41.5)
(68.2)
(55.1)
Total general market risk
34.7
21.6
76.7
92.0
Undiversified risk
20.6
13.8
20.0
21.4
Other ⁴
1.3
1.7
1.5
1.6
Total
56.6
37.1
98.2
115.0
1 Average VaR calculated for each 12 month period.
2 In July 2023, the Group implemented a new APRA accredited market risk engine. Comparative information has been revised to conform to presentation in the
current period.
3 Includes basis risk.
4 Includes ASB, PTBC and CBA Europe.
247
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
248
9.3
Market risk (continued)
Non-traded market risk
Interest rate risk in the banking book
Interest rate risk is the current and prospective impact to the Group’s financial condition due to adverse changes in interest rates to
which the Group’s Balance Sheet is exposed. The maturity transformation activities of the Group create mismatches in the repricing
terms of asset and liability positions. These mismatches may have undesired earnings and value outcomes depending on the interest
rate movements. The Group’s objective is to manage interest rate risk to achieve stable and sustainable net interest income in the long-
term.
The Group measures and manages the impact of interest rate risk in two ways:
(a) Next 12 months’ earnings
Interest rate risk from an earnings perspective is the impact based on changes to the net interest income over the next 12 months.
The risk to net interest income over the next 12 months from changes in interest rates is measured on a monthly basis.
Earnings risk is measured through sensitivity analysis, which applies an instantaneous 100 basis point parallel shock in interest rates
across the yield curve.
The prospective change to the net interest income is measured by using an Asset and Liability Management simulation model which
incorporates both existing and anticipated new business in its assessment. The change in the balance sheet product mix, growth,
funding and pricing strategies is incorporated.
Assets and liabilities that reprice directly from observable market rates are measured based on the full extent of the rate shock that is
applied.
Products that are priced based on Group administered or discretionary interest rates and that are impacted by customer behaviour are
measured by taking into consideration the historic repricing strategy of the Group and repricing behaviours of customers. In addition to
considering how the products have been repriced in the past the expected change in price based on both the current and anticipated
competitive market forces are also considered in the sensitivity analysis.
Following the increase in interest rates during the year, the Group’s sensitivity to a 100bps interest rate shock reduced.
30 Jun 24
30 Jun 23 ¹
Net interest earnings at risk
$M
$M
Average monthly exposure
376.2
751.1
High monthly exposure
526.4
1,660.1
Low monthly exposure
216.4
415.4
As at balance date
374.6
591.5
1 Net interest earnings at risk estimates for the year ended 30 June 2023 are based on modelled outcomes restated to reflect assumptions that applied at 30 June
2023.
(b) Economic value
Interest rate risk from the economic value perspective is based on a 20-day 99.0% VaR measure.
Measuring the change in the economic value of equity is an assessment of the long-term impact to the earnings potential of the Group
present valued to the current date. The Group assesses the potential change in its economic value of equity through the application of
the VaR methodology.
A 20-day 99.0% VaR measure is used to capture the net economic value impact over the long-term or total life of all balance sheet
assets and liabilities to adverse changes in interest rates.
The impact of customer prepayments on the contractual cash flows for fixed rate products is included in the calculation. Cash flows for
discretionary priced products are behaviourally adjusted and repriced at the resultant profile.
The figures in the following table represent the net present value of the expected change in the Group’s future earnings in all future
periods for the remaining term of all existing assets and liabilities.
248
Notes to the Financial Statements
For the year ended 30 June 2024
249
CBA FINANCIAL REPORT
2024 Annual report
9.3
Market risk (continued)
30 Jun 24 ¹
30 Jun 23 ¹
Non-traded interest rate risk VaR (20-day 99.0% confidence)
$M
$M
Average daily exposure
586.7
534.8
High daily exposure
655.2
629.6
Low daily exposure
518.4
428.5
As at balance date
603.6
537.6
1 Average VaR calculated for each 12 month period.
Structural foreign exchange risk
Structural foreign exchange risk is the risk that movements in foreign exchange rates may have an adverse effect on the Group's
Australian dollar earnings and economic value when the Group's foreign currency denominated retained earnings and capital are
translated into Australian dollars. The Group's material risk exposures to this risk arise from the following currencies: New Zealand
Dollar, US Dollar, Euro and British Pound Sterling.
Lease residual value risk
The Group takes lease residual value risk on assets such as industrial, mining, rail, aircraft, marine, and other equipment. A lease
residual value guarantee exposes the Group to a potential fall in prices of these assets below the guarantee level at lease expiry.
Defined benefit plans
As part of the Commonwealth Bank Group Super Fund's (the Fund) merger with Australian Retirement Trust (ART), a portion of the
defined benefit and all defined contribution members transferred to ART following the tranche one transfer completed in November 2023
(refer to Note 10.2). The Group remains exposed to market risk in relation to the defined benefit plans in the Fund and ART.
249
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
250
9.4
Liquidity and funding risk
OVERVIEW
The Group’s liquidity and funding policies are designed to ensure it will meet its obligations as and when they fall due by ensuring it is
able to raise funding on an unsecured or secured basis, has sufficient liquid assets to borrow against under repurchase agreements or
sell to raise immediate funds without adversely affecting the Group’s net asset value.
The Group’s liquidity policies are designed to ensure it maintains sufficient holdings of cash and liquid assets to meet its obligations to
customers, in both ordinary market conditions and during periods of severe stress. These policies are intended to protect the value of
the Group’s operations during periods of unfavourable market conditions.
The Group’s funding policies are designed to achieve diversified sources of funding by product, term, maturity date, investor type,
investor location, currency and concentration, on a cost effective basis. This objective applies to the Group’s wholesale and retail
funding activities.
Liquidity and funding risk management framework
The CBA Board is responsible for the sound and prudent management of liquidity risk across the Group. The Group’s liquidity and
funding policies, structured under the Group Liquidity Risk Management Framework, are approved by the Board. The Group Asset and
Liability Committee’s (ALCO) responsibilities include asset and liability management, reviewing liquidity and funding policies and
strategies, and monitoring compliance with those policies across the Group. Group Treasury manages the Group’s liquidity and funding
positions in accordance with the Group’s Liquidity Policy and supporting standards, and has ultimate authority to execute liquidity and
funding decisions should the Group Contingency Funding Plan be activated. Risk Management provides oversight of the Group’s
liquidity and funding risks, compliance with Group policies and manages the Group’s relationship with prudential regulators.
Subsidiaries within the Group apply their own liquidity and funding strategies to address their specific needs. The Group’s New Zealand
banking subsidiary, ASB, manages its own domestic liquidity and funding needs in accordance with its own liquidity policy and the
policies of the Group. ASB’s liquidity policy is also overseen by the RBNZ.
Liquidity and funding policies and management
The Group’s liquidity and funding policies provide that:
• an excess of liquid assets over the minimum prescribed under APRA’s Liquidity Coverage Ratio (LCR) requirement is maintained.
Australian ADIs are required to meet a 100% LCR, calculated as the ratio of high quality liquid assets to 30 day net cash outflows
projected under a prescribed stress scenario;
• a surplus of stable funding from various sources, as measured by APRA’s Net Stable Funding Ratio (NSFR), is maintained. The NSFR
is calculated by applying factors prescribed by APRA to assets and liabilities to determine a ratio of required stable funding to available
stable funding which must be greater than 100%;
• scenario analysis is central to the Group’s liquidity management framework and the Group undertakes additional stress testing
including market specific and idiosyncratic scenarios over and above the regulatory defined scenarios;
• additional funding and liquidity metrics are calculated and monitored as early warning indicators of a potential stress event;
• short and long-term wholesale funding limits are established, monitored and reviewed regularly;
• the Group’s wholesale funding market capacity is regularly assessed and used as a factor in funding strategies;
• Group Treasury maintains a portfolio of highly liquid assets to meet liquidity requirements under a range of market conditions. The
liquid asset portfolio includes cash and liquid assets, including government and Australian semi-government securities, meeting
APRA’s High Quality Liquid Asset (HQLA) definition and other highly liquid assets which are repo-eligible with the Reserve Bank of
Australia (RBA);
• liquid assets are held in Australian dollar and foreign currency denominated securities in accordance with expected requirements;
• in line with APRA’s requirements to hold adequate levels of self-securitised assets, the Group also holds internal RMBS (minimum
value of 30% of Group net cash outflows as defined under the LCR), which are mortgages that have been securitised but retained by
the Bank, that are repo-eligible with the RBA under the Exceptional Liquidity Assistance (ELA) arrangement; and
• offshore branches and subsidiaries adhere to liquidity policies and hold appropriate foreign currency liquid assets to meet required
regulations. Material banking subsidiaries are required to maintain an LCR of at least 100%.
The Group’s key funding tools include:
• consumer retail funding base, which includes a wide range of retail transaction accounts, savings accounts and term deposits for
individual consumers;
• small business customer and institutional deposit base; and
• wholesale domestic and international funding programmes, which include Australian dollar Negotiable Certificates of Deposit, US and
Euro Commercial Paper programmes, Australian dollar Domestic Debt Programme, US Medium-Term Note Programmes, Euro
Medium-Term Note Programme, multi-jurisdiction Covered Bond programmes and Medallion securitisation programmes. Additionally,
the Group has accessed the RBA's Term Funding Facility (TFF) which was fully repaid during the period and RBNZ term lending
facilities.
Liquidity modelling and forecasting is undertaken on a daily basis to ensure the Group meets its internal and regulatory liquidity
requirements at all times. A regulatory liquidity management reporting system models and reports regulatory liquidity outcomes.
Additionally, a comprehensive Funds Transfer Pricing framework is in place to attribute the cost of funding and liquidity to business units
and to provide appropriate incentives to inform business decision making.
250
Notes to the Financial Statements
For the year ended 30 June 2024
251
CBA FINANCIAL REPORT
2024 Annual report
9.4
Liquidity and funding risk (continued)
Contingency Funding Plan
The Group maintains a Contingency Funding Plan which details how the Group would respond to a liquidity stress event. The plan
includes details of roles and responsibilities including the committee of responsible executives, early warning indicators and trigger
events, and potential contingent funding actions that could be undertaken to manage the Group’s liquidity position as well as a
communications strategy. The plan is regularly tested and is approved by the Board on an annual basis.
Maturity analysis of monetary liabilities
Amounts shown in the tables below are based on contractual undiscounted cash flows for the remaining contractual maturities.
Group
Maturity Period as at 30 June 2024
0 to 3
3 to 12
1 to 5
Over 5
months
months
years
years
Total
$M
$M
$M
$M
$M
Monetary liabilities
Deposits and other public borrowings ¹
720,131
160,826
9,605
2
890,564
Payables to financial institutions
17,446
7,525
–
–
24,971
Liabilities at fair value through income statement
44,712
2,741
235
–
47,688
Derivative financial instruments:
Held for trading
15,069
–
–
–
15,069
Held for hedging purposes (net-settled)
311
208
1,081
1,662
3,262
Held for hedging purposes (gross-settled):
Outflows
2,704
20,346
58,579
40,659
122,288
Inflows
(1,660)
(19,866)
(55,670)
(36,533)
(113,729)
Term funding from central banks
496
2,710
1,099
–
4,305
Debt issues and loan capital
12,351
44,912
102,752
47,628
207,643
Lease liabilities
109
337
1,313
1,005
2,764
Other monetary liabilities
5,937
714
1,306
784
8,741
Total monetary liabilities
817,606
220,453
120,300
55,207
1,213,566
Financial guarantees ²
3,814
–
–
–
3,814
Performance related contingencies ²
13,650
–
–
–
13,650
Commitments to provide credit and other commitments ²
185,776
–
–
–
185,776
Total off balance sheet items
203,240
–
–
–
203,240
Total monetary liabilities and off balance sheet items
1,020,846
220,453
120,300
55,207
1,416,806
1 Includes deposits that are contractually at call, customer savings and cheque accounts. These accounts provide a stable source of long-term funding.
2 All off balance sheet items are included in the 0 to 3 months maturity band to reflect their earliest possible maturity.
251
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
252
9.4
Liquidity and funding risk (continued)
Group ¹
Maturity Period as at 30 June 2023
0 to 3
3 to 12
1 to 5
Over 5
months
months
years
years
Total
$M
$M
$M
$M
$M
Monetary liabilities
Deposits and other public borrowings ²
723,448
137,043
11,183
55
871,729
Payables to financial institutions
17,596
4,532
–
–
22,128
Liabilities at fair value through income statement
36,765
3,462
169
–
40,396
Derivative financial instruments:
Held for trading
21,899
–
–
–
21,899
Held for hedging purposes (net-settled)
51
159
1,132
1,711
3,053
Held for hedging purposes (gross-settled):
Outflows
1,624
4,440
36,163
25,585
67,812
Inflows
(920)
(4,020)
(34,070)
(23,104)
(62,114)
Term funding from central banks
15,036
32,799
6,423
–
54,258
Debt issues and loan capital
8,822
26,931
96,661
48,682
181,096
Lease liabilities
137
340
1,126
1,466
3,069
Other monetary liabilities
3,849
907
1,227
805
6,788
Total monetary liabilities
828,307
206,593
120,014
55,200
1,210,114
Financial guarantees ³
3,823
–
–
–
3,823
Performance related contingencies ³
12,722
–
–
–
12,722
Commitments to provide credit and other commitments ³
185,302
–
–
–
185,302
Total off balance sheet items
201,847
–
–
–
201,847
Total monetary liabilities and off balance sheet items
1,030,154
206,593
120,014
55,200
1,411,961
1 Comparative information has been restated to conform to presentation in the current period.
2 Includes deposits that are contractually at call, customer savings and cheque accounts. These accounts provide a stable source of long-term funding.
3 All off balance sheet items are included in the 0 to 3 months maturity band to reflect their earliest possible maturity.
252
Notes to the Financial Statements
For the year ended 30 June 2024
253
CBA FINANCIAL REPORT
2024 Annual report
9.4
Liquidity and funding risk (continued)
Bank
Maturity Period as at 30 June 2024
0 to 3
3 to 12
1 to 5
Over 5
months
months
years
years
Total
$M
$M
$M
$M
$M
Monetary liabilities
Deposits and other public borrowings ¹
664,042
139,098
6,006
1
809,147
Payables to financial institutions
16,945
7,525
–
–
24,470
Liabilities at fair value through income statement
44,863
2,140
236
–
47,239
Derivative financial instruments:
Held for trading
16,821
–
–
–
16,821
Held for hedging purposes (net-settled)
294
300
1,370
1,799
3,763
Held for hedging purposes (gross-settled):
Outflows
2,105
23,605
54,487
38,239
118,436
Inflows
(1,333)
(23,368)
(52,401)
(34,472)
(111,574)
Due to controlled entities
9,067
5,666
23,256
10,169
48,158
Term funding from central banks
–
–
–
–
–
Debt issues and loan capital
10,598
40,757
86,244
43,881
181,480
Lease liabilities
98
284
1,196
975
2,553
Other monetary liabilities
6,086
679
1,193
771
8,729
Total monetary liabilities
769,586
196,686
121,587
61,363
1,149,222
Financial guarantees ²
3,160
–
–
–
3,160
Performance related contingencies ²
13,650
–
–
–
13,650
Commitments to provide credit and other commitments ²
171,141
–
–
–
171,141
Total off balance sheet items
187,951
–
–
–
187,951
Total monetary liabilities and off balance sheet items
957,537
196,686
121,587
61,363
1,337,173
1 Includes deposits that are contractually at call, customer savings and cheque accounts. These accounts provide a stable source of long-term funding.
2 All off balance sheet items are included in the 0 to 3 months maturity band to reflect their earliest possible maturity.
253
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
254
9.4
Liquidity and funding risk (continued)
Bank ¹
Maturity Period as at 30 June 2023
0 to 3
3 to 12
1 to 5
Over 5
months
months
years
years
Total
$M
$M
$M
$M
$M
Monetary liabilities
Deposits and other public borrowings ²
666,970
116,075
8,751
–
791,796
Payables to financial institutions
16,949
4,532
–
–
21,481
Liabilities at fair value through income statement
35,926
3,164
168
–
39,258
Derivative financial instruments:
Held for trading
23,619
–
–
–
23,619
Held for hedging purposes (net-settled)
279
287
1,327
1,885
3,778
Held for hedging purposes (gross-settled):
Outflows
3,480
5,794
41,649
26,023
76,946
Inflows
(2,656)
(5,317)
(39,486)
(23,581)
(71,040)
Due to controlled entities
7,253
5,416
21,172
8,745
42,586
Term funding from central banks
15,019
32,365
2,290
–
49,674
Debt issues and loan capital
6,889
22,575
79,032
43,318
151,814
Lease liabilities
119
291
994
1,411
2,815
Other monetary liabilities
4,176
871
1,135
790
6,972
Total monetary liabilities
778,023
186,053
117,032
58,591
1,139,699
Financial guarantees ³
3,132
–
–
–
3,132
Performance related contingencies ³
12,722
–
–
–
12,722
Commitments to provide credit and other commitments ³
169,970
–
–
–
169,970
Total off balance sheet items
185,824
–
–
–
185,824
Total monetary liabilities and off balance sheet items
963,847
186,053
117,032
58,591
1,325,523
1 Comparative information has been restated to conform to presentation in the current period.
2 Includes deposits that are contractually at call, customer savings and cheque accounts. These accounts provide a stable source of long-term funding.
3 All off balance sheet items are included in the 0 to 3 months maturity band to reflect their earliest possible maturity.
254
Notes to the Financial Statements
For the year ended 30 June 2024
255
CBA FINANCIAL REPORT
2024 Annual report
9.5
Disclosures about fair values
Fair value hierarchy for financial assets and liabilities measured at fair value
The classification in the fair value hierarchy of the Group’s and the Bank’s financial assets and liabilities measured at fair value is
presented in the tables below. An explanation of how fair values are calculated and the levels in the fair value hierarchy, is included in
the accounting policy within this note.
Group ¹ ²
Fair value as at 30 June 2024
Fair value as at 30 June 2023
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
$M
$M
$M
$M
$M
$M
$M
$M
Financial assets measured at fair
value on a recurring basis
Assets at fair value through income
statement:
Trading
18,235
7,904
5
26,144
14,919
7,544
36
22,499
Other
–
52,705
184
52,889
–
44,907
221
45,128
Derivative assets
109
17,869
80
18,058
122
23,761
62
23,945
Investment securities at fair value
through other comprehensive income
82,878
13,111
785
96,774
69,939
14,138
594
84,671
Total financial assets measured at
fair value
101,222
91,589
1,054
193,865
84,980
90,350
913
176,243
Financial liabilities measured at fair
value on a recurring basis
Liabilities at fair value through income
statement
8,606
38,735
–
47,341
6,176
33,927
–
40,103
Derivative liabilities
55
18,745
50
18,850
26
25,257
64
25,347
Total financial liabilities measured
at fair value
8,661
57,480
50
66,191
6,202
59,184
64
65,450
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 Comparative information has been revised to conform to presentation in the current period.
Bank ¹ ²
Fair value as at 30 June 2024
Fair value as at 30 June 2023
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
$M
$M
$M
$M
$M
$M
$M
$M
Financial assets measured at fair
value on a recurring basis
Assets at fair value through income
statement:
Trading
18,235
8,014
5
26,254
14,913
7,543
36
22,492
Other
–
52,805
135
52,940
–
44,977
172
45,149
Derivative assets
109
19,609
79
19,797
122
25,401
62
25,585
Investment securities at fair value
through other comprehensive income
75,620
11,450
777
87,847
64,657
12,587
587
77,831
Total financial assets measured at
fair value
93,964
91,878
996
186,838
79,692
90,508
857
171,057
Financial liabilities measured at fair
value on a recurring basis
Liabilities at fair value through income
statement
8,606
38,305
–
46,911
5,888
33,260
–
39,148
Derivative liabilities
55
19,935
50
20,040
26
26,638
64
26,728
Total financial liabilities measured
at fair value
8,661
58,240
50
66,951
5,914
59,898
64
65,876
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 Comparative information has been revised to conform to presentation in the current period.
255
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
256
At 30 June 2024, the Group’s and the Bank’s assets held for sale included $867 million of assets measured at fair value on a non-
recurring basis in Level 3.
Analysis of movements between fair value hierarchy levels
The tables below summarise movements in Level 3 balances during the year. Transfers have been reflected as if they had taken place
at the end of the reporting periods. Transfers in and out of Level 3 were due to changes in the observability of inputs.
Level 3 movement analysis
Group
Financial Assets
Financial
Liabilities
Derivative
assets
Investment
securities at
fair value
through OCI
Assets at fair
value through
income
statement
Derivative
liabilities
$M
$M
$M
$M
As at 1 July 2022
74
616
289
(135)
Purchases
2
70
93
(7)
Sales/settlements
(2)
–
(67)
70
Gains/(losses) in the period:
Recognised in the Income Statement
5
–
(58)
8
Recognised in the Statement of Comprehensive Income
(17)
(97)
–
–
Transfers in
–
5
–
–
Transfers out
–
–
–
–
As at 30 June 2023
62
594
257
(64)
Gains/(losses) recognised in the Income Statement for financial
instruments held as at 30 June 2023
27
–
(58)
(22)
As at 1 July 2023
62
594
257
(64)
Purchases
40
106
90
(19)
Sales/settlements
(24)
(5)
(46)
12
Gains/(losses) in the period:
Recognised in the Income Statement
5
–
22
21
Recognised in the Statement of Comprehensive Income
(3)
90
–
–
Transfers in
–
–
–
–
Transfers out
–
–
(134)
–
Reclassified to held for sale
–
–
–
–
As at 30 June 2024
80
785
189
(50)
Gains/(losses) recognised in the Income Statement for financial
instruments held as at 30 June 2024
10
–
1
(12)
9.5
Disclosures about fair values (continued)
256
Notes to the Financial Statements
For the year ended 30 June 2024
257
CBA FINANCIAL REPORT
2024 Annual report
Bank
Financial Assets
Financial
Liabilities
Derivative
assets
Investment
securities at
fair value
through OCI
Assets at fair
value through
income
statement
Derivative
liabilities
$M
$M
$M
$M
As at 1 July 2022
74
591
228
(135)
Purchases
2
70
93
(7)
Sales/settlements
(2)
–
(67)
70
Gains/(losses) in the period:
Recognised in the Income Statement
5
–
(46)
8
Recognised in the Statement of Comprehensive Income
(17)
(79)
–
–
Transfers in
–
5
–
–
Transfers out
–
–
–
–
As at 30 June 2023
62
587
208
(64)
Gains/(losses) recognised in the Income Statement for financial
instruments held as at 30 June 2023
27
–
(46)
(22)
As at 1 July 2023
62
587
208
(64)
Purchases
40
104
90
(19)
Sales/settlements
(25)
(5)
(49)
12
Gains/(losses) in the period:
Recognised in the Income Statement
5
–
23
21
Recognised in the Statement of Comprehensive Income
(3)
91
–
–
Transfers in
–
–
–
–
Transfers out
–
–
(132)
–
As at 30 June 2024
79
777
140
(50)
Gains/(losses) recognised in the Income Statement for financial
instruments held as at 30 June 2024
10
–
1
(12)
9.5
Disclosures about fair values (continued)
257
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
258
9.5
Disclosures about fair values (continued)
Fair value information for financial instruments not measured at fair value
The estimated fair values and fair value hierarchy of the Group’s and the Bank’s financial instruments not measured at fair value are
presented below. Fair values of financial assets and liabilities not included in the table below approximate their carrying values.
Group
30 Jun 24
30 Jun 23
Carrying
value
Fair value
Carrying
value
Fair value
Total
Level 1
Level 2
Level 3
Total
Total
Level 1
Level 2
Level 3
Total
$M
$M
$M
$M
$M
$M
$M
$M
$M
$M
Financial assets
Investment
securities at
amortised cost
1,239
–
1,239
–
1,239
2,032
–
2,018
–
2,018
Loans and other
receivables
942,210
–
–
941,289
941,289
926,082
–
–
920,035
920,035
Financial
liabilities
Deposits and other
public borrowings
882,922
–
449,140
433,710
882,850
864,995
–
448,327
416,352
864,679
Debt issues
144,530
–
144,740
–
144,740
122,267
–
122,330
–
122,330
Loan capital
35,938
9,525
27,393
–
36,918
32,598
10,920
21,531
–
32,451
Bank
30 Jun 24
30 Jun 23
Carrying
value
Fair value
Carrying
value
Fair value
Total
Level 1
Level 2
Level 3
Total
Total
Level 1
Level 2
Level 3
Total
$M
$M
$M
$M
$M
$M
$M
$M
$M
$M
Financial assets
Investment
securities at
amortised cost
1,239
–
1,239
–
1,239
2,032
–
2,018
–
2,018
Loans and other
receivables
834,024
–
–
833,750
833,750
816,140
–
–
811,426
811,426
Financial
liabilities
Deposits and other
public borrowings
802,882
–
369,049
433,710
802,759
786,267
–
369,619
416,352
785,971
Debt issues
120,834
–
121,045
–
121,045
95,893
–
95,947
–
95,947
Loan capital
35,931
9,537
27,393
–
36,930
32,587
10,936
21,531
–
32,467
258
Notes to the Financial Statements
For the year ended 30 June 2024
259
CBA FINANCIAL REPORT
2024 Annual report
9.5
Disclosures about fair values (continued)
ACCOUNTING POLICIES
Valuation
Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. On initial recognition, the transaction price generally represents the fair value of the financial
instrument, unless there is observable information from an active market that provides a more appropriate fair value.
The fair value for financial instruments traded in active markets at the reporting date is based on their quoted market price or dealer
price quotations, without any deduction for transaction costs. Assets and long positions are measured at a quoted bid price, liabilities
and short positions are measured at a quoted asking price. Where the Group has positions with offsetting market risks, mid-market
prices are used to measure the offsetting risk positions and a quoted bid or asking price adjustment is applied only to the net open
position as appropriate.
Non-market quoted financial instruments are mostly valued using valuation techniques based on observable inputs except where
observable market data is unavailable. Where market data is unavailable the financial instrument is initially recognised at the transaction
price, which is generally the best indicator of fair value. This may differ from the value obtained from the valuation model. The timing of
the recognition in the Income Statement of this initial difference in fair value depends on the individual facts and circumstances of each
transaction, but is never later than when the market data becomes observable. The difference may be either amortised over the life of
the transaction, recognised when the inputs become observable or on derecognition of the instrument, as appropriate.
The fair value of over-the-counter (OTC) derivatives includes credit valuation adjustments (CVA) for derivative assets to reflect the credit
worthiness of the counterparty. Fair value of uncollateralised derivative assets and uncollateralised derivative liabilities incorporate
funding valuation adjustments (FVA) to reflect funding costs and benefits to the Group. These adjustments are applied after considering
any relevant collateral or master netting arrangements.
Fair value hierarchy
The Group utilises various valuation techniques and applies a hierarchy for valuation inputs that maximise the use of observable market
data, if available.
Under AASB 13 Fair Value Measurement all financial and non-financial assets and liabilities measured or disclosed at fair value are
categorised into one of the following three fair value hierarchy levels:
Quoted prices in active markets – Level 1
This category includes assets and liabilities for which the valuation is determined by reference to unadjusted quoted prices for identical
assets or liabilities in active markets where the quoted price is readily available, and the price represents actual and regularly occurring
market transactions on an arm’s length basis. An active market is one in which transactions occur with sufficient volume and frequency
to provide pricing information on an ongoing basis.
Financial instruments included in this category are liquid government bonds, listed equities and exchange traded derivatives.
Valuation technique using observable inputs – Level 2
This category includes assets and liabilities that have been valued using inputs other than quoted prices as described for Level 1, but
which are observable for the asset or liability, either directly or indirectly. The valuation techniques include the use of discounted cash
flow analysis, option pricing models and other market accepted valuation models.
Financial instruments included in this category are financial institution and corporate bonds, certificates of deposit, bank bills,
commercial papers, mortgage-backed securities and OTC derivatives including interest rate swaps, cross currency swaps and FX
options.
Valuation technique using significant unobservable inputs – Level 3
This category includes assets and liabilities where the valuation incorporates significant inputs that are not based on observable market
data (unobservable inputs). Unobservable inputs are those not readily available in an active market due to market illiquidity or
complexity of the product. These inputs are generally derived and extrapolated from observable inputs to match the risk profile of the
financial instrument, and are calibrated against current market assumptions, historic transactions and economic models, where
available. These inputs may include the timing and amount of future cash flows, rates of estimated credit losses, discount rates and
volatility. Financial instruments included in this category for the Group are certain exotic OTC derivatives and unlisted equity
instruments.
As at 30 June 2024, the Group held an unlisted equity investment in Klarna Group plc (Klarna) measured on a recurring basis at fair
value through other comprehensive income of $574 million (30 June 2023: $419 million). The valuation of the investment is based on a
methodology which considers revenue multiples of market listed comparable companies as well as any recent market transactions.
Comparable listed companies are included based on industry, size, development stage and/or strategy. A revenue multiple is derived for
each comparable company identified and then discounted for considerations such as illiquidity. The Group adopted an adjusted revenue
multiple of 3.9x in its valuation as at 30 June 2024 (30 June 2023: 4.1x). The effect of adjusting the revenue multiples by +/-20%,
representing a range of reasonably possible alternatives, would be to increase the fair value by up to $115 million or to decrease the fair
value by up to $115 million with all the potential effect impacting investment securities revaluation reserve.
259
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
260
9.5
Disclosures about fair values (continued)
Critical accounting judgements and estimates
Valuation techniques are used to estimate the fair value of securities. When using valuation techniques the Group makes maximum use
of market inputs and relies as little as possible on entity specific inputs. It incorporates all factors that the Group believes market
participants would consider in setting a price and is consistent with accepted economic methodologies for pricing financial instruments.
Data inputs that the Group relies upon when valuing financial instruments relate to counterparty credit risk, volatility, correlation and
extrapolation.
Periodically, the Group calibrates its valuation techniques and tests them for validity using prices from any observable current market
transaction in the same instruments (i.e. without modification or repackaging) and any other available observable market data.
9.6
Collateral arrangements
Collateral accepted as security for assets
The Group takes collateral where it is considered necessary to support both on and off balance sheet transactions. The Group
evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral taken, if deemed necessary, is based on
management’s credit evaluation of the counterparty. The Group has the right to sell, re-pledge, or otherwise use some of the collateral
received. At balance sheet date the carrying value of cash accepted as collateral (and recognised on the Group’s and the Bank’s
Balance Sheets) and the fair value of securities accepted as collateral (but not recognised on the Group’s or the Bank’s Balance
Sheets) were as follows:
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Cash
5,744
6,838
5,521
6,603
Securities
93,782
56,129
93,481
56,389
Collateral held
99,526
62,967
99,002
62,992
Collateral held which is re-pledged or sold
30,830
28,660
30,830
28,660
Assets pledged
As part of standard terms of transactions with other banks, the Group has provided collateral to secure liabilities. At balance sheet date,
the carrying value of assets pledged as collateral to secure liabilities were as follows:
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$M
$M
$M
$M
Cash
5,385
6,205
5,054
5,870
Securities ¹
52,372
41,378
52,647
41,549
Assets pledged
57,757
47,583
57,701
47,419
Assets pledged which can be re-pledged or
re-sold by counterparty
52,372
41,378
52,647
41,549
1 These balances include assets sold under repurchase agreements. The liabilities related to these repurchase agreements are disclosed in Note 4.1 and 4.2.
The Group and the Bank have pledged collateral as part of entering into repurchase and derivative agreements. These transactions are
governed by standard industry agreements.
260
Notes to the Financial Statements
For the year ended 30 June 2024
261
CBA FINANCIAL REPORT
2024 Annual report
9.7
Offsetting financial assets and financial liabilities
The table below identifies amounts that have been offset on the Balance Sheet and amounts covered by enforceable netting
arrangements or similar agreements that do not qualify for set off. Cash settled derivatives that trade on an exchange are deemed to be
economically settled and therefore outside the scope of these disclosures.
Group
30 June 24
Subject to enforceable master netting or similar agreements
Amounts offset on the
Balance Sheet
Amounts not offset on the
Balance Sheet
Gross
Balance
Sheet
amount
Amount
offset
Reported
on the
Balance
Sheet
Financial
instruments ¹
Financial
collateral
(received)/
pledged ¹
Net
amount
Not subject
to netting
agreements
Total
Balance
Sheet
amount
Financial instruments
$M
$M
$M
$M
$M
$M
$M
$M
Derivative assets
17,520
–
17,520
(10,653)
(4,275)
2,592
538
18,058
Securities purchased under
agreements to resell:
At amortised cost
39,225
(3,466)
35,759
(2,787)
(32,916)
56
–
35,759
At fair value through income
statement
54,424
(8,355)
46,069
(7,570)
(38,452)
47
–
46,069
Equity securities sold not delivered
1,055
(685)
370
–
–
370
7
377
Total financial assets
112,224
(12,506)
99,718
(21,010)
(75,643)
3,065
545
100,263
Derivative liabilities
(17,022)
–
(17,022)
10,653
3,224
(3,145)
(1,828)
(18,850)
Securities sold under agreements to
repurchase:
At amortised cost
(7,246)
3,466
(3,780)
347
3,433
–
–
(3,780)
At fair value through income
statement
(44,867)
8,355
(36,512)
10,010
26,502
–
–
(36,512)
Equity securities purchased not
delivered
(1,029)
685
(344)
–
–
(344)
(37)
(381)
Total financial liabilities
(70,164)
12,506
(57,658)
21,010
33,159
(3,489)
(1,865)
(59,523)
1 For the purpose of this disclosure, the related amounts of financial instruments and financial collateral not set off on the Balance Sheet have been capped by
relevant netting agreements so as not to exceed the net amounts of financial assets/(liabilities) reported on the Balance Sheet, i.e. over collateralisation, where it
exists, is not reflected in the tables. As a result, the above collateral balances will not correspond to the tables in Note 9.6.
261
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
262
9.7
Offsetting financial assets and financial liabilities (continued)
Group
30 June 23
Subject to enforceable master netting or similar agreements
Amounts offset on the
Balance Sheet
Amounts not offset on the
Balance Sheet
Gross
Balance
Sheet
amount
Amount
offset
Reported
on the
Balance
Sheet
Financial
instruments ¹
Financial
collateral
(received)/
pledged ¹
Net
amount
Not subject
to netting
agreements
Total
Balance
Sheet
amount
Financial instruments
$M
$M
$M
$M
$M
$M
$M
$M
Derivative assets ²
23,686
–
23,686
(12,894)
(5,567)
5,225
259
23,945
Securities purchased under
agreements to resell:
At amortised cost
13,144
(3,697)
9,447
(810)
(8,432)
205
–
9,447
At fair value through income
statement
43,420
(4,421)
38,999
(7,357)
(31,536)
106
–
38,999
Equity securities sold not delivered
860
(521)
339
–
–
339
4
343
Total financial assets
81,110
(8,639)
72,471
(21,061)
(45,535)
5,875
263
72,734
Derivative liabilities ²
(23,136)
–
(23,136)
12,894
4,321
(5,921)
(2,211)
(25,347)
Securities sold under agreements to
repurchase:
At amortised cost
(3,513)
3,003
(510)
415
95
–
–
(510)
At fair value through income
statement
(37,786)
5,115
(32,671)
7,752
24,919
–
–
(32,671)
Equity securities purchased not
delivered
(831)
521
(310)
–
–
(310)
(11)
(321)
Total financial liabilities
(65,266)
8,639
(56,627)
21,061
29,335
(6,231)
(2,222)
(58,849)
1 For the purpose of this disclosure, the related amounts of financial instruments and financial collateral not set off on the Balance Sheet have been capped by
relevant netting agreements so as not to exceed the net amounts of financial assets/(liabilities) reported on the Balance Sheet, i.e. over collateralisation, where it
exists, is not reflected in the tables. As a result, the above collateral balances will not correspond to the tables in Note 9.6.
2 Comparative information has been restated to reflect the legal terms of centrally cleared derivatives.
262
Notes to the Financial Statements
For the year ended 30 June 2024
263
CBA FINANCIAL REPORT
2024 Annual report
9.7
Offsetting financial assets and financial liabilities (continued)
Bank
30 June 24
Subject to enforceable master netting or similar agreements
Amounts offset on the
Balance Sheet
Amounts not offset on the
Balance Sheet
Gross
Balance
Sheet
amount
Amount
offset
Reported
on the
Balance
Sheet
Financial
instruments ¹
Financial
collateral
(received)/
pledged ¹
Net
amount
Not subject
to netting
agreements
Total
Balance
Sheet
amount
Financial instruments
$M
$M
$M
$M
$M
$M
$M
$M
Derivative assets
19,262
–
19,262
(12,069)
(4,096)
3,097
535
19,797
Securities purchased under
agreements to resell:
At amortised cost
38,825
(3,466)
35,359
(2,789)
(32,513)
57
–
35,359
At fair value through income
statement
54,523
(8,355)
46,168
(7,670)
(38,452)
46
–
46,168
Total financial assets
112,610
(11,821)
100,789
(22,528)
(75,061)
3,200
535
101,324
Derivative liabilities
(18,259)
–
(18,259)
12,069
3,013
(3,177)
(1,781)
(20,040)
Securities sold under agreements to
repurchase:
At amortised cost
(7,140)
3,466
(3,674)
347
3,327
–
–
(3,674)
At fair value through income
statement
(45,248)
8,355
(36,893)
10,112
26,678
(103)
–
(36,893)
Total financial liabilities
(70,647)
11,821
(58,826)
22,528
33,018
(3,280)
(1,781)
(60,607)
1 For the purpose of this disclosure, the related amounts of financial instruments and financial collateral not set off on the Balance Sheet have been capped by
relevant netting agreements so as not to exceed the net amounts of financial assets/(liabilities) reported on the Balance Sheet, i.e. over collateralisation, where it
exists, is not reflected in the tables. As a result, the above collateral balances will not correspond to the tables in Note 9.6.
263
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
264
9.7
Offsetting financial assets and financial liabilities (continued)
Bank
30 June 23
Subject to enforceable master netting or similar agreements
Amounts offset on the
Balance Sheet
Amounts not offset on the
Balance Sheet
Gross
Balance
Sheet
amount
Amount
offset
Reported
on the
Balance
Sheet
Financial
instruments ¹
Financial
collateral
(received)/
pledged ¹
Net
amount
Not subject
to netting
agreements
Total
Balance
Sheet
amount
Financial instruments
$M
$M
$M
$M
$M
$M
$M
$M
Derivative assets ²
25,354
–
25,354
(14,559)
(5,341)
5,454
231
25,585
Securities purchased under
agreements to resell:
At amortised cost
13,334
(3,697)
9,637
(911)
(8,521)
205
–
9,637
At fair value through income
statement
43,490
(4,421)
39,069
(7,427)
(31,536)
106
–
39,069
Total financial assets
82,178
(8,118)
74,060
(22,897)
(45,398)
5,765
231
74,291
Derivative liabilities ²
(24,556)
–
(24,556)
14,559
4,172
(5,825)
(2,172)
(26,728)
Securities sold under agreements to
repurchase:
At amortised cost
(3,513)
3,003
(510)
415
95
–
–
(510)
At fair value through income
statement
(37,956)
5,115
(32,841)
7,922
24,919
–
–
(32,841)
Total financial liabilities
(66,025)
8,118
(57,907)
22,896
29,186
(5,825)
(2,172)
(60,079)
1 For the purpose of this disclosure, the related amounts of financial instruments and financial collateral not set off on the Balance Sheet have been capped by
relevant netting agreements so as not to exceed the net amounts of financial assets/(liabilities) reported on the Balance Sheet, i.e. over collateralisation, where it
exists, is not reflected in the tables. As a result, the above collateral balances will not correspond to the tables in Note 9.6.
2 Comparative information has been restated to reflect the legal terms of centrally cleared derivatives.
Related amounts not set off on the Balance Sheet
Derivative assets and liabilities
The “Financial Instruments” column identifies financial assets and liabilities that are subject to set off under netting agreements, such as
the ISDA Master Agreement. All outstanding transactions with the same counterparty can be offset and close-out netting applied if an
event of default or other predetermined events occur. Financial collateral refers to cash and non-cash collateral obtained to cover the
net exposure between counterparties by enabling the collateral to be realised in an event of default or if other predetermined events
occur.
Repurchase and reverse repurchase agreements and security lending agreements
The “Financial Instruments” column identifies financial assets and liabilities that are subject to set off under netting agreements, such as
global master repurchase agreements, global master securities lending agreements and agreements settled through specific Central
Security Depositories. Under these netting agreements, all outstanding transactions with the same counterparty can be offset and close-
out netting applied if an event of default or other predetermined events occur. Financial collateral typically comprises highly liquid
securities which are legally transferred and can be liquidated in the event of counterparty default.
ACCOUNTING POLICIES
Financial assets and liabilities are offset and the net amount is presented in the Balance Sheet if, and only if, there is a currently
enforceable legal right to offset the recognised amounts, and there is an intention to settle on a net basis, or to realise the asset and
settle the liability simultaneously.
264
Notes to the Financial Statements
For the year ended 30 June 2024
265
CBA FINANCIAL REPORT
2024 Annual report
10
Employee benefits
OVERVIEW
The Group employs over 48,000 people across multiple jurisdictions and remunerates its employees through both fixed and variable
arrangements. This section outlines details of the share-based payment and superannuation components of employee remuneration
and provides an overview of key management personnel arrangements.
10.1
Share-based payments
The Group operates a number of cash and equity settled share plans as detailed below.
Long Term Variable Remuneration (LTVR)
The Group’s LTVR awards to the CEO, Group Executives and CEO of ASB have been made under the Employee Equity Plan (EEP)
since the 2019 financial year award (2020 financial year for CEO ASB). LTVR focuses efforts on longer-term performance achievement,
including relative shareholder returns to support creation of sustainable long-term shareholder value.
Participants are awarded a maximum number of performance rights, which may convert into CBA shares on a one-for-one basis (or for
the 2021 to 2023 financial year awards, a cash equivalent as determined by the Board).
The rights granted for the 2020 financial year award may vest at the end of a performance period of four years subject to the satisfaction
of performance measures as follows:
For the 2020 financial year award to the CEO and Group Executives:
• 75% of the award is assessed against Total Shareholder Return (TSR) compared the 20 largest companies listed on the ASX (by
market capitalisation) at the beginning of the performance period, excluding resource companies and CBA.
• 12.5% of the award is assessed against a relative Trust and Reputation measure; and
• 12.5% of the award is assessed against an absolute Employee Engagement measure.
For the 2020 financial year award made to the CEO of ASB:
• 50% of the award is assessed against TSR compared the 20 largest companies listed on the ASX (by market capitalisation) at the
beginning of the performance period, excluding resource companies and CBA.
• 25% of the award is assessed against an ASB relative Trust and Reputation measure; and
• 25% of the award is assessed against an ASB absolute Employee Engagement measure.
For the 2020 financial year award that vested in August 2023, (including the CEO ASB 2020 financial year award), a positive TSR
gateway applied to the Trust and Reputation and Employee Engagement measures. For further information on the vesting outcome
please refer to the Remuneration Report.
For awards made from the 2021 financial year to the CEO, Group Executives and CEO of ASB, the performance rights will be tested
against the following performance measures at the end of four years and the number of performance rights will be adjusted accordingly:
• 50% of the award is assessed against TSR compared the 20 largest companies listed on the ASX (by market capitalisation) at the
beginning of the performance period, excluding resource companies and CBA (General ASX).
• 50% of the award is assessed against TSR compared to a peer group of 8 financial services companies determined by the Board
(Financial Services).
Any performance rights from the 2021 to 2023 financial year awards and CEO ASB’s 2024 financial year award, and restricted shares
from the 2024 financial year award, that remain on foot after the performance test will be subject to a further holding period, for the:
• 2021 and 2022 financial year awards, in two equal tranches of two and three years for the CEO, and one and two years for other
participants, and
• 2023 and 2024 financial year awards, two years for the CEO and one year for other participants.
Refer to the Remuneration Report for further details on LTVR.
The following table provides details of outstanding awards of performance rights granted under LTVR.
Outstanding
Outstanding
Expense
Period
1 July
Granted
Vested
Forfeited
30 June
($'000)
2024
726,245
117,530
(298,038)
(24,245)
521,492
7,142
2023
873,046
121,882
(268,683)
–
726,245
8,776
The weighted average fair value at the grant date was $56.96 for the ASX General TSR tranche and $51.58 for the Financial Services
TSR tranche (2023: $65.37 for the ASX General TSR tranche and $57.30 for the Financial Services TSR tranche). The fair value of the
performance rights granted during the period has been independently calculated at grant date using a Monte Carlo pricing model based
on market information. The assumptions included in the valuations of the 2024 financial year awards include a share price of $102.15
and $118.87, a risk-free interest rate of 4.45% and 4.13%, a 4.31% and 3.76% dividend yield on the Bank’s ordinary shares and a
volatility in the Bank share price of 25% and 20%.
265
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
266
10.1
Share-based payments (continued)
Long-Term Alignment Remuneration (LTAR)
The Group’s LTAR awards to the CEO, Group Executives and CEO of ASB are made under the Employee Equity Plan (EEP), with the
first grant being made in the 2021 financial year.
The LTAR award is granted as restricted share units which are entitlements to fully paid ordinary CBA shares (or cash equivalent as
determined by the Board) with a payment equivalent to dividends paid during the restriction period only made on restricted share units
that vest, subject to service conditions and a pre-vest assessment for the 2023 and 2024 financial year awards. The restricted share unit
service period is:
• CEO: 50% of the CEO’s LTAR award will vest after four years, and 50% after five years;
• Group Executives and the CEO ASB: 100% of the LTAR award will vest after four years.
The following table provides details of outstanding awards of restricted share units granted under LTAR.
Outstanding
Outstanding
Expense
Period
1 July
Granted
Vested
Forfeited
30 June
($'000)
2024
398,590
111,169
–
–
509,759
12,163
2023
280,108
118,482
–
–
398,590
9,188
The weighted average fair value at grant date of the LTAR awards issued during the year was $102.43 (2023: $104.58).
Employee Equity Plan (EEP)
The EEP facilitates mandatory short-term variable remuneration deferral, sign-on and retention awards. Participants are awarded
restricted shares that vest provided the participant remains in employment of the Group until vesting and subject to risk and malus
review. The following table provides details of outstanding awards of restricted shares granted under the EEP.
Outstanding
Outstanding
Expense
Period
1 July
Granted
Vested
Forfeited
30 June
($'000)
2024
1,264,801
814,666
(660,513)
(71,394)
1,347,560
67,454
2023
1,325,524
714,452
(706,372)
(68,803)
1,264,801
64,584
The weighted average fair value at grant date of the awards issued during the year was $101.68 (2023: $96.34).
Employee Share Acquisition Plan (ESAP)
Under the ESAP eligible employees have the opportunity to receive up to $1,000 worth of shares each year.
The number of shares a participant receives is calculated by dividing the award amount by the average price paid for CBA shares
purchased during the purchase period preceding the grant date. Shares granted are restricted from sale until the earlier of three years
or until such time as the participant ceases employment with the Group. Participants receive full dividend entitlements and voting rights
attached to ESAP shares.
During the financial year ended 30 June 2024 the Board approved an award of $1,000 to each eligible employee to recognise their
contribution during the previous financial year.
The following table provides details of shares granted under the ESAP.
Number of shares
Total number of
Issue price
Total fair value
Period
Allocation date
Participants
allocated per participant
shares allocated
$
($'000)
2024
15 Sep 2023
33,146
9
298,314
101.06
30,148
2023
16 Sep 2022
31,034
10
310,340
96.44
29,929
It is estimated that approximately $32 million of CBA shares will be awarded under the 2024 grant.
266
Notes to the Financial Statements
For the year ended 30 June 2024
267
CBA FINANCIAL REPORT
2024 Annual report
10.1
Share-based payments (continued)
EEP cash-settled equity awards
EEP cash-settled equity awards are provided to certain employees based overseas to facilitate mandatory short-term variable
remuneration deferral, sign-on and retention awards.
The following table provides a summary of the movement in cash-settled awards during the year.
Outstanding
Outstanding
Expense
Period
1 July
Granted
Vested
Forfeited
30 June
($'000)
2024
166,513
84,923
(78,341)
(11,793)
161,302
7,235
2023
183,678
89,754
(94,327)
(12,592)
166,513
8,209
The weighted average fair value at grant date of the awards issued during the year was $100.61 (2023: $95.73).
Salary sacrifice arrangements
The Group facilitates the purchase of CBA shares via salary sacrifice as follows:
Type
Arrangements
Salary sacrifice
• Australian based employees and Non-Executive Directors can elect to sacrifice between $2,000 and $5,000 p.a.
of their fixed remuneration and/or annual STVR or fees (in the case of Non-Executive Directors).
• Restricted from sale for a minimum of two years and a maximum of seven years or earlier, if the employee
ceases employment with the Group (or retires from the Group in the case of Non-Executive Directors).
Non-Executive
Directors
• Non-Executive Directors can elect to apply a percentage of after-tax fees towards the acquisition of CBA
shares.
Shares are purchased on market at the prevailing market price at that time and receive full dividend entitlements and voting rights. The
following table provides details of shares granted under the Employee Salary Sacrifice Share Plan and Non-Executive Director Share
Plans (voluntary fee sacrifice).
Average purchase
Total purchase
Number of
price
consideration
Period
Participants
shares purchased
$
($'000)
2024
1,706
57,017
107.56
6,133
2023
1,676
59,448
101.92
6,059
During the year five (2023: five) Non-Executive Directors applied $166,200.48 in fees (2023: $200,618.09) to purchase 1,548 shares
(2023: 1,971 shares).
267
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
268
10.2
Retirement benefit obligations
1 The defined benefit formulae are generally based on final salary, or final average salary, and service.
2 Actuarial assessment for Australian Retirement Trust will be completed during the financial year ending 30 June 2025.
Regulatory framework
All plans operate under trust law with the assets of the plans held separately in trust. The plans are managed and administered on
behalf of the members in accordance with the terms of each trust deed and relevant legislation. The funding of the plans complies with
regulations in Australia and the UK respectively.
Funding and contributions
Commonwealth Bank Group Super
On 21 February 2023, the trustee of Group Super (Commonwealth Bank Officers Superannuation Corporation Pty Limited) announced
that it had entered into a Memorandum of Understanding to pursue a merger with the Australian Retirement Trust (ART). The merger is
occurring via a split successor fund transfer in two tranches. On 4 November 2023, tranche one transfer was completed with a portion of
the defined benefit and all defined contribution members transferred to ART. Tranche two transfer to ART for lifetime pension members
is expected to be completed during the year ending 30 June 2025.
Following the tranche one transfer to ART, only a portion of the defined benefit members is left in Group Super. The expense
recognised in the current period in relation to the contributions was $119 million. Employer contributions paid to the plan are subject to
tax at the rate of 15% in the plan.
Australian Retirement Trust
Following the completion of the tranche one transfer, the expense recognised in the current period in relation to the Group’s contribution
was $212 million. The Group agreed to make contributions of $27 million per year effective from 4 November 2023 to ensure that the
defined benefit plans in ART remains in surplus. Employer contributions paid to the plan are subject to tax at the rate of 15% in the plan.
CBA (UK) SBS
On 17 June 2021, the trustees of CBA (UK) SBS executed a GBP426.6 million bulk annuity insurance policy. The insurance policy was
purchased using the existing assets of the plan. The transaction secured an insurance asset that fully matches the remaining pension
liabilities of the Scheme, and is therefore measured at an amount that matches the scheme liabilities. The Group has no further
obligation to make payments into the Scheme but retains responsibility for the benefits provided to the Scheme members.
Name of Plan
Type
Form of Benefit
Date of Last Actuarial
Assessment of the Fund
Commonwealth Bank Group Super
Defined benefits and
accumulation ¹
Indexed pension and lump sum
30 June 2021
Australian Retirement Trust
Defined benefits and
accumulation ¹
Indexed pension and lump sum
N/A ²
Commonwealth Bank of Australia (UK) Staff
Benefits Scheme (CBA (UK) SBS)
Defined benefits and
accumulation ¹
Indexed pension and lump sum
30 June 2022
268
Notes to the Financial Statements
For the year ended 30 June 2024
269
CBA FINANCIAL REPORT
2024 Annual report
10.2
Retirement benefit obligations (continued)
Defined benefit superannuation plan
Australian
Retirement
Trust ¹
Commonwealth Bank
Group Super
CBA (UK) SBS
Total
30 Jun 24
30 Jun 24
30 Jun 23
30 Jun 24 30 Jun 23
30 Jun 24 30 Jun 23
Note
$M
$M
$M
$M
$M
$M
$M
Present value of funded obligations
(826)
(1,732)
(2,453)
(431)
(435)
(2,989)
(2,888)
Fair value of plan assets
1,046
1,907
3,058
472
478
3,425
3,536
Net pension assets
220
175
605
41
43
436
648
Amounts in the Balance Sheet:
Assets
6.3
220
175
605
41
43
436
648
Net assets
220
175
605
41
43
436
648
The amounts recognised in the
Income Statement are as follows:
Current service cost
(10)
(5)
(17)
(4)
(2)
(19)
(19)
Net interest income
6
23
25
2
1
31
26
Total included in superannuation
plan expense
(4)
18
8
(2)
(1)
12
7
The amounts recognised in the
Statement of Comprehensive Income
are as follows:
Return on plan assets
(excluding interest income)
71
(115)
67
(1)
(60)
(45)
7
Actuarial (loss)/gain from changes in assumptions
(35)
(54)
34
4
92
(85)
126
Actuarial losses due to experience
(1)
(103)
(99)
(4)
(34)
(108)
(133)
Total included in Other
Comprehensive Income
35
(272)
2
(1)
(2)
(238)
–
Member contributions
3
2
5
–
–
5
5
Employer contributions
212
119
357
–
–
331
357
Employer financed benefits within
accumulation division ²
(194)
(124)
(300)
–
–
(318)
(300)
1 On 4 November 2023, tranche one transfer was completed with a portion of the defined benefit and all defined contribution members transferred to ART.
2 Represents superannuation contributions made by the Group to meet its obligations to members of the defined contribution plan.
Significant assumptions
Australian
Retirement
Trust
Commonwealth Bank
Group Super
CBA (UK)
SBS
30 Jun 24
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
The above calculations were based on the
following assumptions:
Discount rate, %
5.6
5.6
5.7
5.1
5.3
Inflation rate, %
2.7
2.7
2.5
3.4
3.5
Rate of increases in salary, %
3.5
N/A
3.3
N/A
4.5
Life expectancy of a 60 year old male (years)
29.4
29.4
29.3
27.9
28.6
Life expectancy of a 60 year old female (years)
31.5
31.5
31.5
30.0
30.4
269
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
270
10.2
Retirement benefit obligations (continued)
Sensitivity to changes in assumptions
The table below sets out the sensitivities of the present value of defined benefit obligations for Commonwealth Bank Group Super and
ART to changes in the principal actuarial assumptions:
Australian
Retirement
Trust
Commonwealth Bank
Group Super
30 Jun 24
30 Jun 24
30 Jun 23
Impact of change in assumptions on liabilities increase/(decrease)
%
%
%
0.25% increase in discount rate
(3.8)
(2.7)
(3.1)
0.25% increase in inflation rate
3.0
2.7
2.6
0.25% increase to the rate of increases in salary
1.0
N/A
0.4
Longevity increase of one year
1.9
6.0
4.6
CBA (UK) SBS has a low level of risk due to the insurance policy, whereby the present value of the plan liabilities is fully matched by the
fair value of the insurance asset.
Average duration
The average duration of defined benefit obligation at 30 June is as follows:
Australian
Retirement
Trust
Commonwealth
Bank
Group Super
CBA (UK)
SBS
Commonwealth
Bank
Group Super
CBA (UK)
SBS
30 Jun 24
30 Jun 24
30 Jun 24
30 Jun 23
30 Jun 23
Years
Years
Years
Years
Years
Average duration at balance date
10.9
10.9
13.0
10.8
13.0
Risk management
The pension plans expose the Group to longevity risk, currency risk, interest rate risk, inflation risk and market risk. The trustees
perform Asset-Liability Matching (ALM) exercises to ensure the plan assets are well matched to the nature and maturities of the defined
benefit obligations.
Inflation and interest rate risks are partly mitigated by investing in long dated fixed interest securities which better match the average
duration of liabilities and entering into inflation and interest rate swaps.
The allocation of assets backing the defined benefit portion of the Commonwealth Bank Group Super and ART are as follows:
Australian
Retirement Trust
Commonwealth Bank Group Super
30 Jun 24
30 Jun 24
30 Jun 23
Asset allocations
Fair value
$ M
% of plan
asset
Fair value
$ M
% of plan
asset
Fair value
$ M
% of plan
asset
Cash
21
2.0
42
2.2
148
4.8
Equities – Australian ¹
251
24.0
4
0.2
181
5.9
Equities – Overseas ¹
314
30.0
–
–
449
14.7
Bonds – Commonwealth Government ¹
13
1.2
742
38.9
1,054
34.5
Bonds – Semi-Government ¹
8
0.8
621
32.5
743
24.3
Bonds – Corporate and other ¹
172
16.5
396
20.8
38
1.2
Real Estate and Infrastructure ²
199
19.0
–
–
307
10.0
Other ³
68
6.5
102
5.4
138
4.6
Total fair value of plan assets
1,046
100.0
1,907
100.0
3,058
100.0
1 Values based on prices or yields quoted in an active market.
2 This includes listed and unlisted property and infrastructure investments.
3 These are alternative investments which are not included in the traditional asset classes of equities, fixed interest securities, real estate and cash. They include
multi-asset investments, liquid alternative investments and hedge funds.
The Australian equities fair value includes $21.4 million (30 June 2023: $4.8 million) of Commonwealth Bank shares. The real estate fair
value includes $1.7 million (30 June 2023: $0.5 million) of property assets leased to the Bank. Corporate and other bonds at 30 June
2024 includes $7.9m of Commonwealth Bank debt securities (30 June 2023: Nil).
270
Notes to the Financial Statements
For the year ended 30 June 2024
271
CBA FINANCIAL REPORT
2024 Annual report
10.3
Key management personnel
Detailed remuneration disclosures by Key Management Personnel (KMP) are provided in the Remuneration Report of the Directors’
Report on pages 104 to 132.
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
Key management personnel compensation
$'000
$'000
$'000
$'000
Short-term benefits ¹
21,835
23,001
20,281
21,518
Post-employment benefits
476
488
433
445
Long-term benefits
373
345
334
307
Share-based payments
21,051
21,695
19,285
19,973
Total
43,735
45,529
40,333
42,243
1 Short-term benefits include termination benefits of $611,301 (30 June 2023: Nil).
Security holdings
Details of the aggregate security holdings of KMP are set out below.
Previous
Acquired/
years
Net
Balance
Granted as
awards
change
Balance
Equity Class ¹
1 July 23 ²
remuneration
vested ³
other ⁴
30 June 24 ⁵
Non-Executive Directors
Ordinary ⁶
30,743
3,142
–
(3,060)
30,825
PERLS
3,924
–
–
(2,120)
1,804
Executives
Ordinary
365,117
–
271,927
(358,026)
279,018
Deferred STVR shares
80,170
52,487
(55,585)
(6,772)
70,300
LTAR restricted share units
298,974
89,309
–
(35,433)
352,850
LTVR performance rights
535,587
89,306
(215,652)
(52,999)
356,242
Deferred one-off shares
3,451
–
(690)
–
2,761
PERLS
626
–
–
(626)
–
1 LTVR performance rights are subject to performance hurdles. Deferred STVR shares represent the STVR previously awarded under executive arrangements in prior
years, as well as the CEO ASB’s 2019 financial year deferred STVR award. Deferred one-off shares includes one-off awards received as deferred shares. PERLS
include cumulative holdings of all PERLS securities issued by the Group.
2 Comparative information has been restated to reflect prior period adjustments.
3 LTVR performance rights, LTAR restricted share units and deferred STVR shares become ordinary shares (as applicable) or are cash settled upon vesting.
4 Net change other incorporates changes resulting from purchases, sales, forfeitures and other transfers of securities, including changes to the KMP population during
the year.
5 30 June 2024 balances represent aggregate shareholdings of all KMP at balance date. This does not include KMP who ceased during the 2024 financial year.
6 Non-Executive Directors are required to hold CBA shares equivalent to 100% of Board Chair fees for the Chair and 100% of Board member fees for Non-Executive
Directors. This is to be accumulated over five years commencing on the later of 1 July 2019 or the date of appointment, valued with reference to the prevailing CBA
share price at the relevant accumulation commencement date.
Loans to KMP
All loans to KMP (including close family members or entities controlled, jointly controlled, or significantly influenced by them, or any
entity over which any of those family members or entities held significant voting power) have been made in the ordinary course of
business on normal commercial terms and conditions no more favourable than those given to other employees and customers, including
the term of the loan, security required and the interest rate (which may be fixed or variable). There has been no write down of loans
during the period.
Details of aggregate loans to KMP are set out below:
30 Jun 24
30 Jun 23 ¹
$'000
$'000
Loans
17,357
16,612
Interest charged
473
500
1 Comparative information has been restated to reflect prior period adjustments.
271
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
272
10.3
Key management personnel (continued)
Other transactions of KMP
Financial instrument transactions
Financial instrument transactions (other than loans and shares disclosed within this report) of KMP occur in the ordinary course of
business on normal commercial terms and conditions no more favourable than those given to other employees and customers.
Disclosure of financial instrument transactions regularly made as part of normal banking operations is limited to disclosure of such
transactions with KMP and entities controlled or significantly influenced by them.
All such financial instrument transactions that have occurred between entities within the Group and their KMP have been trivial or
domestic in nature and were in the nature of normal personal banking and deposit transactions.
Transactions other than financial instrument transactions of banks
All other transactions with KMP and their related entities and other related parties are conducted on an arm’s length basis in the normal
course of business and on commercial terms and conditions. These transactions principally involve the provision of financial and
investment services by entities not controlled by the Group.
Services agreements
The maximum contingent liability for termination benefits in respect of service agreements with the Chief Executive Officer and other
KMP at 30 June 2024 was $1,275,364 (30 June 2023: $1,873,998).
272
Notes to the Financial Statements
For the year ended 30 June 2024
273
CBA FINANCIAL REPORT
2024 Annual report
11
Group structure
OVERVIEW
The Group structure includes the Bank legal entity and its interests in operating and special purpose subsidiaries, joint ventures and
associates. These entities were either acquired or established and their classification is driven by the Bank’s level of control or influence.
The operating activities of these entities include banking, advice, funds management, specialised customer financing and asset backed
financing across multiple jurisdictions.
11.1
Investments in subsidiaries and other entities
Subsidiaries
The key subsidiaries of the Bank are:
Entity Name
Entity Name
Australia
CBA Covered Bond Trust
Medallion Trust Series 2017-1
Commonwealth Securities Limited
Medallion Trust Series 2017-1P
Medallion Trust Series 2008-1R
Medallion Trust Series 2017-2
Medallion Trust Series 2014-1P
Medallion Trust Series 2018-1
Medallion Trust Series 2014-2
Medallion Trust Series 2018-1P
Medallion Trust Series 2015-1
Medallion Trust Series 2019-1
Medallion Trust Series 2015-2
Medallion Trust Series 2023-1
Medallion Trust Series 2016-1
Medallion Trust Series 2023-2
Medallion Trust Series 2016-2
Residential Mortgage Group Pty Ltd
All the above subsidiaries are 100% owned and incorporated in Australia.
Entity Name
Incorporated in
New Zealand and other overseas
ASB Bank Limited
New Zealand
ASB Covered Bond Trust
New Zealand
ASB Holdings Limited
New Zealand
ASB Term Fund
New Zealand
Medallion NZ Series Trust 2009-1R
New Zealand
Commonwealth Bank of Australia (Europe) N.V.
The Netherlands
All the above subsidiaries are 100% owned.
273
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
274
11.1
Investments in subsidiaries and other entities (continued)
Critical accounting judgements and estimates
Control and voting rights
Determining whether the Group has control is generally straightforward based on ownership of the majority of the voting rights. Holding
more than 50% of an entity’s voting rights typically indicates that the Group has control over the entity. Significant judgement is involved
where either the Group is deemed to control an entity despite holding less than 50% of the voting rights, or where the Group does not
control an entity despite holding more than 50% of the voting rights.
Agent or principal
The Group is deemed to have power over an investment fund when it holds either the responsible entity (RE) and/or the manager
function of that fund. Whether that power translates to control depends on whether the Group is deemed to act as an agent or a
principal of that fund. Management have determined that the Group acts as a principal and controls a fund when it cannot be easily
removed as a manager or RE by investors and when its economic interest in that fund is substantial compared to the economic interest
of other investors. In all other cases the Group acts as agent and does not control the fund.
Significant restrictions
There were no significant restrictions on the ability to transfer cash or other assets, pay dividends or other capital distributions, provide
or repay loans and advances between the entities within the Group. There were also no significant restrictions on the Group's ability to
access or use the assets and settle the liabilities of the Group resulting from protective rights of non-controlling interests.
Associates and joint ventures
There were no significant restrictions on the ability of associates or joint ventures to transfer funds to the Bank or its subsidiaries in the
form of cash dividends or to repay loans or advances made.
The Group’s investments in associates and joint ventures are shown in the table below.
Group ¹
30 June 24
30 June 23
30 June 24
30 June 23
Ownership
Ownership Principal
Country of
Balance
$M
$M
interest %
interest % activities
incorporation
date
Vietnam International Commercial Joint
Stock Bank
601
584
20
20 Commercial
banking
Vietnam
31-Dec
Superannuation and Investments HoldCo
Pty Limited
406
419
45
45 Wealth
management Australia
30-Jun
PEXA Group Limited
310
321
24
24 Property
settlement
Australia
30-Jun
Lendi Group Pty Ltd
240
366
42
42 Mortgage
broking
Australia
30-Jun
Other
114
137
Various
Various Various
Various
Various
Carrying amount of investments in
associates and joint ventures
1,671
1,827
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
Group ¹
30 June 24
30 June 23
Share of associates' and joint ventures profits
$M
$M
Operating profits/(losses) before income tax
44
(22)
Income tax (expense)/benefit
(5)
20
Operating profits/(losses) after income tax ²
39
(2)
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 This amount is recognised net of impairment in the share of profits of associates and joint ventures within net other operating income.
274
Notes to the Financial Statements
For the year ended 30 June 2024
275
CBA FINANCIAL REPORT
2024 Annual report
11.1
Investments in subsidiaries and other entities (continued)
Structured entities
A structured entity is an entity in which voting or similar rights are not the dominant factor in deciding control. Structured entities are
generally created to achieve a narrow and well defined objective with restrictions around their ongoing activities. Depending on the
Group’s power over the activities of the entity and its exposure to and ability to influence its own returns, it may consolidate the entity. In
other cases, it may sponsor or have exposure to such an entity but not consolidate it.
Consolidated structured entities
The Group has the following contractual arrangements which require it to provide financial support to its structured entities.
Securitisation structured entities
The Group provides liquidity facilities to Medallion and Medallion NZ structured entities. The liquidity facilities can only be drawn to cover
cash flow shortages relating to mismatches in timing of cash inflows due from securitised asset pools and cash outflows due to note
holders. These “timing mismatch” facilities rank pari passu with other senior secured creditors. The facilities limit is $1,473 million
(30 June 2023: $1,498 million). This includes $1,225 million (30 June 2023: $1,225 million) in relation to the structured entity where the
Bank holds all of the issued instruments and $1,371 million (30 June 2023; $1,372 million) where the Group holds all of the issued
instruments.
The Group has no contractual obligations to purchase assets from its securitisation structured entities.
Covered bonds trust
The Group provides funding and support facilities to CBA Covered Bond Trust and ASB Covered Bond Trust (the ‘Trusts’). The Trusts
are bankruptcy remote SPVs that guarantee any debt obligations owing under the US$40 billion CBA Covered Bond Programme and
the EUR7 billion ASB Covered Bond Programme, respectively. The funding facilities allow the Trusts to hold sufficient residential
mortgage loans to support the guarantees provided to the Covered Bonds. The Group also provides various swaps to the Trusts to
hedge any interest rate and currency mismatches. The Group, either directly or via its wholly owned subsidiaries, Securitisation
Advisory Services Pty Limited and Securitisation Management Services Limited, provides various services to the Trusts including
servicing and monitoring of the residential mortgages.
Structured asset finance structured entities
The Group has no contractual obligation to provide financial support to any of its structured asset finance structured entities.
During the year ended 30 June 2023, the Bank entered into a debt forgiveness arrangement with four wholly owned structured entities
for a total of $55 million. The financial impact of the debt forgiveness was fully eliminated on consolidation.
Unconsolidated structured entities
The Group has exposure to various securitisation vehicles via Residential Mortgage-backed Securities (RMBS) and Asset-backed
Securities (ABS). The Group may also provide derivatives and other commitments to these vehicles. The Group also has exposure to
investment funds and other financing vehicles.
Securitisations
Securitisations involve transferring assets into an entity that sells beneficial interests to investors through the issue of debt and equity
notes with varying levels of subordination. The notes are collateralised by the assets transferred to these vehicles and pay a return
based on the returns of those assets, with residual returns paid to the most subordinated investor.
The Group may trade or invest in RMBS and ABS, which are backed by Commercial Properties, Consumer Receivables, Equipment
and Auto Finance. The Group may also provide lending, derivatives, liquidity and commitments to these securitisation entities.
Other financing
Asset-backed entities are used to provide tailored lending for the purchase or lease of assets transferred by the Group or its clients. The
assets are normally pledged as collateral to the lenders. The Group engages in raising finance for assets such as aircraft, trains,
vessels and other infrastructure. The Group may also provide lending, derivatives, liquidity and commitments to these entities.
Investment funds
The Group conducts investment management and other fiduciary activities as responsible entity, trustee, custodian, adviser or manager
for investment funds and trusts, including superannuation and approved deposit funds, wholesale and retail trusts. The Group’s
exposure to investment funds includes holding units in the investment funds and trusts, providing lending facilities, derivatives and
receiving fees for services.
The nature and extent of the Group’s interests in these entities are summarised below. Interests do not include derivatives and other
positions where the Group creates rather than absorbs variability of the structured entity, for example deposits the funds place with the
Group. These have been excluded from the tables on pages 276 to 277.
275
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
276
11.1
Investments in subsidiaries and other entities (continued)
30 Jun 24
RMBS
ABS
Other
financing
Investment
funds
Total
Exposures to unconsolidated structured entities
$M
$M
$M
$M
$M
Investment securities
3,177
157
–
–
3,334
Loans and other receivables
8,132
2,665
3,398
4,088
18,283
Total on Balance Sheet exposures
11,309
2,822
3,398
4,088
21,617
Total notional amounts of off Balance Sheet exposures ¹
4,186
1,194
1,258
5,852
12,490
Total maximum exposure to loss
15,495
4,016
4,656
9,940
34,107
Total assets of the entities ²
50,629
13,999
9,647
29,300
103,575
1 Relates to undrawn facilities.
2 Size of the entities is generally the total assets of the entities, except for Real Estate Investment Trusts where the size is based on the Group’s credit exposure of
$9,924 million.
30 Jun 23
RMBS
ABS
Other
financing
Investment
funds
Total
Exposures to unconsolidated structured entities
$M
$M
$M
$M
$M
Investment securities
3,000
114
–
–
3,114
Loans and other receivables
7,827
3,214
2,438
4,486
17,965
Total on Balance Sheet exposures
10,827
3,328
2,438
4,486
21,079
Total notional amounts of off Balance Sheet exposures ¹
4,888
776
1,119
5,699
12,482
Total maximum exposure to loss
15,715
4,104
3,557
10,185
33,561
Total assets of the entities ²
43,442
13,094
10,946
29,559
97,041
1 Relates to undrawn facilities.
2 Size of the entities is generally the total assets of the entities, except for Real Estate Investment Trusts where the size is based on the Group’s credit exposure of
$10,169 million.
The Group’s exposure to loss depends on the level of subordination of the interest, which indicates the extent to which other parties are
obliged to absorb credit losses before the Group. An overview of the Group’s interests, relative ranking and external credit rating, for
vehicles that have credit subordination in place, is summarised in the table below, and includes securitisation vehicles and other
financing.
30 Jun 24
Ranking and credit rating of exposures to
RMBS
ABS
Other
financing
Total
unconsolidated structured entities
$M
$M
$M
$M
Senior ¹
15,475
4,016
4,656
24,147
Mezzanine ²
20
–
–
20
Total maximum exposure to loss
15,495
4,016
4,656
24,167
1 All ABS and RMBS exposures and $3,397 million of other financing exposures are rated investment grade. $1,259 million of other financing exposures are
sub-investment grade.
2 All RMBS exposures are rated investment grade.
276
Notes to the Financial Statements
For the year ended 30 June 2024
277
CBA FINANCIAL REPORT
2024 Annual report
11.1
Investments in subsidiaries and other entities (continued)
30 Jun 23
Ranking and credit rating of exposures to
RMBS
ABS
Other
financing
Total
unconsolidated structured entities
$M
$M
$M
$M
Senior ¹
15,707
4,100
3,557
23,364
Mezzanine ²
8
4
–
12
Total maximum exposure to loss
15,715
4,104
3,557
23,376
1 All ABS and RMBS exposures and $2,541 million of other financing exposures are rated investment grade. $1,016 million of other financing exposures are sub-
investment grade.
2 All RMBS exposures are rated investment grade.
Sponsored unconsolidated structured entities
For the purposes of this disclosure, the Group sponsors an entity when it manages or advises the entity’s program, places securities
into the market on behalf of the entity, provides liquidity and/or credit enhancements to the entity, or the Group’s name appears in the
Structured Entity.
As at 30 June 2024, the Group has not sponsored any unconsolidated structured entities.
ACCOUNTING POLICIES
Subsidiaries
The consolidated financial report comprises the financial report of the Bank and its subsidiaries. Subsidiaries are entities (including
structured entities) over which the Bank has control. The Bank controls an entity when it has:
• power over the relevant activities of the entity, for example through voting or other rights;
• exposure to, or rights to, variable returns from the Bank’s involvement with the entity; and
• the ability to use its power over the entity to affect the Bank’s returns from the entity.
Consolidation of structured entities
The Group exercises judgement at inception and periodically thereafter, to assess whether that structured entity should be consolidated
based on the Bank’s power over the relevant activities of the entity and the significance of its exposure to variable returns of the
structured entity. Such assessments are predominately required for the Group’s securitisation program, structured transactions and
involvement with investment funds.
Transactions between subsidiaries in the Group are eliminated. Non-controlling interests and the related share of profits in subsidiaries
are shown separately in the consolidated Income Statement, Statement of Comprehensive Income, and Balance Sheet. Subsidiaries
are consolidated from the date on which control is transferred to the Group and de-consolidated when control ceases. Subsidiaries are
accounted for at cost less accumulated impairments at the Bank level.
Business combinations
Business combinations are accounted for using the acquisition method. At the acquisition date, the cost of the business is the fair value
of the purchase consideration, measured as the aggregate of the fair values of assets transferred, equity instruments issued, or
liabilities incurred or assumed at the date of exchange.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at fair value on the
acquisition date. Goodwill represents the excess of the fair value of the purchase consideration over the fair value of the Group’s share
of assets acquired and liabilities and contingent liabilities assumed on the date of acquisition. If there is a deficit instead, the discount on
acquisition is recognised directly in the consolidated Income Statement, but only after a reassessment of the identification and
measurement of the net assets acquired.
Investments in associates and joint ventures
Associates and joint ventures are entities over which the Group has significant influence or joint control, but not control. In the
consolidated financial report, they are equity accounted. They are initially recorded at cost and adjusted for the Group’s share of the
associates’ and joint ventures’ post-acquisition profits or losses and other comprehensive income, less any dividends received. At the
Bank level, they are accounted for at cost less accumulated impairments.
The Group assesses, at each balance sheet date, whether there is any objective evidence of impairment. If there is an indication that an
investment may be impaired, then the entire carrying amount of the investment in associate or joint venture is tested for impairment by
comparing the recoverable amount (higher of value in use and fair value less disposal costs) with the carrying amount. The subsequent
reversal of impairment losses is recognised in the Income Statement if there has been a change in the estimates used to determine the
recoverable amount since the impairment loss was recognised.
277
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
278
11.2
Related party disclosures
Banking transactions are entered into with related parties in the normal course of business on an arm’s length basis. These include
loans, deposits and foreign currency transactions, upon which some fees and commissions may be earned. Details of amounts paid or
received from related parties, in the form of interest or dividends, are set out in Notes 2.1 and 2.3.
The Bank’s aggregate investments in, and loans to controlled entities are disclosed in the table below. Amounts due to controlled
entities are disclosed in the Balance Sheet of the Bank.
Bank
30 June 24
30 June 23
$M
$M
Shares in controlled entities
8,093
8,623
Loans to controlled entities at amortised cost
49,224
45,377
Loans to controlled entities at fair value through Income Statement
911
636
Total shares in and loans to controlled entities
58,228
54,636
As at 30 June 2024, loans to controlled entities at amortised cost in the table above are presented net of $9 million provisions for
impairment (30 June 2023: $11 million).
One of the Bank’s subsidiaries issued a professional indemnity insurance policy to the Group’s controlled entities holding an Australian
Financial Services or Australian Credit licence. The total amount insured under this policy as at 30 June 2024 was up to $99 million (30
June 2023: $124 million). The subsidiary also issues a comprehensive crime and professional indemnity insurance policy to the Group.
The total amount insured under this policy as at 30 June 2024 was up to $100 million (30 June 2023: $150 million).
As at 30 June 2024, the Bank had reimbursement arrangements in place totalling $16 million (30 June 2023: $82 million), for Aligned
Advice remediation with its subsidiaries Financial Wisdom Limited, and Commonwealth Financial Planning Limited including the
Pathways business (CFP-Pathways), to cover potential remediation of inappropriate advice and other matters. The Group and the Bank
have provided for these costs.
As at 30 June 2024, the Bank has an indemnity deed in place with Count Financial and Count Limited (previously known as CountPlus)
with a $520 million limit (30 June 2023: $520 million), to cover potential remediation of ongoing service failures to customers,
inappropriate advice and other matters. The Group and the Bank have provided for these costs.
The Bank is the head entity of the tax consolidated group and has entered into tax funding and tax sharing agreements with its eligible
Australian resident subsidiaries. The details of these agreements are set out in Note 2.5. The amount receivable by the Bank under the
tax funding agreement with the tax consolidated entities is $93 million as at 30 June 2024 (30 June 2023: $190 million). This balance is
included in ‘Other assets’ in the Bank’s separate Balance Sheet.
All transactions between Group entities are eliminated on consolidation.
ACCOUNTING POLICIES
Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other
party in making financial or operational decisions, or a separate party controls both. The definition includes subsidiaries, associates,
joint ventures, pension plans as well as other persons.
278
Notes to the Financial Statements
For the year ended 30 June 2024
279
CBA FINANCIAL REPORT
2024 Annual report
11.3
Discontinued operations and businesses held for sale
The Group completed the following business divestments during the years ended 30 June 2024 and 30 June 2023:
PT Bank Commonwealth
On 16 November 2023, the Group announced that it entered into a binding agreement to sell its 99% shareholding in its Indonesian
banking subsidiary, PT Bank Commonwealth (PTBC), to PT Bank OCBC NISP Tbk (OCBC Indonesia), a subsidiary of Oversea-
Chinese Banking Corporation Limited (OCBC) for an upfront cash consideration of $188 million. The sale completed on 1 May 2024,
resulting in a total post-tax loss of $298 million. The loss includes a $133 million impairment loss on remeasurement of PTBC’s net
assets to fair value, an additional $100 million loss recognised upon the completion of the sale, and $65 million of separation costs.
CommInsure General Insurance
On 21 June 2021, the Group announced the sale of CommInsure General Insurance to Hollard Insurance Company Pty Ltd (Hollard).
As part of the sale, the Group established an exclusive 15-year strategic alliance with Hollard for the distribution of home and motor
vehicle insurance products. The sale of CommInsure General Insurance to Hollard completed on 30 September 2022, resulting in a total
post-tax gain of $66 million net of transaction and separation costs. This includes a $179 million post-tax gain recognised during the
year ended 30 June 2023, and post-tax transaction and separation costs of $46 million and $67 million recognised during the years
ended 30 June 2022 and 2021, respectively.
PTBC and CommInsure General Insurance did not represent separate major lines of the Group’s business and were not classified as
discontinued operations.
Financial impact of discontinued operations on the Group
Full year ended ¹
30 June 24
30 June 23
30 June 22
$M
$M
$M
Net other operating income
42
71
381
Operating expenses
(26)
(45)
(217)
Net profit before income tax
16
26
164
Income tax expense
(5)
(8)
(51)
Net profit after income tax and before transaction and separation costs
11
18
113
(Losses)/gains on disposals of businesses net of transaction and separation costs ²
(98)
(116)
985
Net (loss)/profit after income tax from discontinued operations attributable to equity
holders of the Bank
(87)
(98)
1,098
1 Income Statement for discontinued operations includes CFS.
2 Includes post-completion adjustments (such as purchase price adjustments, and finalisation of accounting adjustments for goodwill and foreign currency transaction
reserve recycling), and transaction and separation costs associated with previously announced divestments.
279
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
280
11.3
Discontinued operations and businesses held for sale (continued)
Earnings per share for (loss)/profit from discontinued operations attributable to equity holders of the Bank
Full year ended
30 June 24
30 June 23
30 June 22
Cents per Share
Earnings per share from discontinued operations:
Basic
(5.2)
(5.8)
63.7
Diluted
(4.9)
(5.5)
59.9
Cash flow statement
Full year ended ¹
30 June 24
30 June 23
30 June 22
$M
$M
$M
Net cash used in operating activities
–
–
(53)
Net cash used in investing activities
–
–
(79)
Net cash used in financing activities
–
–
(228)
Net cash outflows from discontinued operations
–
–
(360)
1 Represents cash flows from the underlying businesses classified as discontinued operations and excludes proceeds from disposal, post-completion adjustments, and
transaction and separation costs.
Balance Sheet
As at 30 June 2024 the Group’s assets held for sale include certain structured asset finance leases and properties held for sale of
$870 million (30 June 2023: $5 million).
ACCOUNTING POLICIES
Non-current assets (including disposal groups) are classified as held for sale if they will be recovered primarily through sale rather than
through continuing use. Non-current assets which are to be abandoned, or businesses which are to be closed, are not classified as held
for sale, since the carrying amount will be recovered principally through continuing use. A discontinued operation is a component of an
entity that has been sold, or classified as held for sale, and represents a separate major line of business or geographical area of
operations, is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations, or is a
subsidiary acquired exclusively with a view to resale.
280
Notes to the Financial Statements
For the year ended 30 June 2024
281
CBA FINANCIAL REPORT
2024 Annual report
12
Other
OVERVIEW
This section includes other information required to provide a more complete view of our business. It includes customer related
commitments and contingencies that arise in the ordinary course of business. In addition, it covers the impact of adopting new
accounting standards, notes to the Statement of Cash Flows, remuneration of auditors, and details of events that have taken place
subsequent to the balance sheet date.
12.1
Contingent liabilities, contingent assets and commitments arising from the banking
business
Details of contingent liabilities and off Balance Sheet instruments are presented below and in Note 7.1, in relation to litigation,
investigations and reviews. The face value represents the maximum amount that could be lost if the counterparty fails to meet its
financial obligations. The credit equivalent amounts are a measure of potential loss to the Group in the event of non-performance by the
counterparty. The credit commitments shown in the table below also constitute contingent assets. These commitments would be
classified as loans and other assets in the Balance Sheet should they be drawn upon by the customer.
Group ¹
Face value
Credit equivalent
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
Credit risk related instruments
$M
$M
$M
$M
Financial guarantees
3,814
3,823
3,538
3,553
Performance related contingencies
13,650
12,722
7,518
7,011
Commitments to provide credit and other commitments
185,776
185,302
146,007
146,405
Total credit risk related instruments
203,240
201,847
157,063
156,969
1 Comparative information has been restated to conform to presentation in the current period.
Bank ¹
Face value
Credit equivalent
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
Credit risk related instruments
$M
$M
$M
$M
Financial guarantees
3,160
3,132
2,983
2,937
Performance related contingencies
13,650
12,722
7,518
7,011
Commitments to provide credit and other commitments
171,141
169,970
133,166
133,051
Total credit risk related instruments
187,951
185,824
143,667
142,999
1 Comparative information has been restated to conform to presentation in the current period.
281
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
12.1
Contingent liabilities, contingent assets and commitments arising from the banking
282
business (continued)
ACCOUNTING POLICIES
The types of instruments included in this category are:
• Financial guarantees are unconditional undertakings given to support the obligations of a customer to third parties. They include
documentary letters of credit which are undertakings by the Group to pay or accept drafts drawn by a supplier of goods against
presentation of documents in the event of payment default by a customer. Financial guarantees are recognised within other liabilities
and are initially measured at their fair value, equal to the premium received. Subsequent to initial recognition, the Group’s liability
under each guarantee is measured at the higher of the amount initially recognised less cumulative amortisation recognised in the
Income Statement and the expected credit losses. Any increase in the liability relating to financial guarantees is recorded in the
Income Statement. The premium received is recognised in the Income Statement in other operating income on a straight-line basis
over the life of the guarantee;
• Performance related contingencies are undertakings that oblige the Group to pay third parties should a customer fail to fulfil a
contractual non-monetary obligation and are measured with reference to expected credit losses of which the inherent credit risk is
managed and monitored by the Group; and
• Commitments to provide credit include obligations on the part of the Group to provide credit facilities against which clients can
borrow money under defined terms and conditions. Such loan commitments are made either for a fixed period, or are cancellable by
the Group subject to notice conditions. As facilities may expire without being drawn upon, the notional amounts do not necessarily
reflect future cash requirements. Loan commitments must be measured with reference to expected credit losses required to be
recognised. In the case of undrawn loan commitments, the inherent credit risk is managed and monitored by the Group together with
the drawn component as a single credit exposure. The exposure at default on the entire facility is used to calculate the cumulative
expected credit losses.
The details of the Group’s accounting policies and critical judgements and estimates involved in calculating impairment provisions are
provided in Note 3.2.
282
Notes to the Financial Statements
For the year ended 30 June 2024
283
CBA FINANCIAL REPORT
2024 Annual report
12.2
Notes to the Statements of Cash Flows
(a) Reconciliation of net profit after income tax to net cash provided by operating activities
Group ¹
Bank ¹
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 24
30 Jun 23
$M
$M
$M
$M
$M
Net profit after income tax ²
9,394
9,998
10,690
8,613
9,280
Increase in interest receivable
(645)
(1,795)
(162)
(712)
(1,833)
Increase in interest payable
1,846
3,876
316
1,689
3,416
Net loss/(gain) on sale of controlled entities and associates
221
(291)
(2,079)
366
19
Net loss/(gain) on sale of property, plant and equipment
2
4
(12)
4
4
Equity accounting profit
95
19
(382)
140
8
Loan impairment expense/(benefit)
802
1,108
(357)
715
1,031
Depreciation and amortisation (including asset write downs)
1,440
1,110
1,518
1,232
922
Decrease in other provisions
(157)
(708)
(121)
(179)
(671)
(Decrease)/increase in income taxes payable
(178)
400
97
(186)
217
Increase/(decrease) in deferred tax liabilities
24
(17)
(65)
23
(32)
Decrease/(increase) in deferred tax assets
15
(627)
(1,075)
197
(555)
Decrease/(increase) in accrued fees/reimbursements
receivable
23
(143)
(45)
28
(44)
Increase/(decrease) in accrued fees and other items payable
248
549
(346)
220
402
Cash flow hedge ineffectiveness
8
(8)
4
3
(4)
Fair value hedge ineffectiveness
25
7
(8)
10
(34)
Dividend received – controlled entities and associates
–
–
–
(1,072)
(1,233)
Changes in operating assets and liabilities arising from
cash flow movements
(38,500)
(21,601)
13,851
(38,669)
(21,592)
Other
(286)
(271)
1,416
(234)
(278)
Net cash (used in)/provided by operating activities
(25,623)
(8,390)
23,240
(27,812)
(10,977)
1 Comparative information has been revised to reflect the change detailed in Note 1.1.
2 Includes non-controlling interest.
(b) Reconciliation of cash
For the purposes of the Statements of Cash Flows, cash and cash equivalents include cash and money at short call.
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 22
30 Jun 24
30 Jun 23
$M
$M
$M
$M
$M
Notes, coins and cash at banks
47,321
107,172
119,355
42,896
98,730
Cash and cash equivalents at end of year
47,321
107,172
119,355
42,896
98,730
(c) Disposal of controlled entities
Group
30 Jun 24
30 Jun 23
30 Jun 22
$M
$M
$M
Net assets
401
333
472
Cash consideration received
188
567
1,990
Cash and cash equivalents held in disposed entities
65
–
15
283
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Notes to the Financial Statements
For the year ended 30 June 2024
284
12.3
Remuneration of auditors
During the financial year, the following fees were paid or payable for services provided by the auditor of the Group and the Bank, and its
network firms:
Group
Bank
30 Jun 24
30 Jun 23
30 Jun 24
30 Jun 23
$'000
$'000
$'000
$'000
Audit and review services
Audit and review of financial statements – Group
23,155
22,583
23,155
22,583
Audit and review of financial statements – Controlled entities
7,617
6,026
1,293
1,146
Total remuneration for audit and review services
30,772
28,609
24,448
23,729
Other statutory assurance services
4,740
4,173
4,512
4,001
Other assurance services
9,215
8,005
7,686
6,715
Total remuneration for assurance services
13,955
12,178
12,198
10,716
Total remuneration for audit, review and assurance services
44,727
40,787
36,646
34,445
Other non-audit services
Taxation advice and tax compliance services
56
377
42
231
Other services
147
38
–
2
Total remuneration for other non-audit services
203
415
42
233
Total remuneration for audit, review, assurance and other services ¹
44,930
41,202
36,688
34,678
1 An additional amount of $2,309,242 (30 June 2023: $1,577,288) was paid to PricewaterhouseCoopers by way of fees for entities not consolidated into the financial
statements. Of this amount, $1,593,790 (30 June 2023: $1,326,549) relates to audit, review and assurance services.
The Audit Committee has considered the non-audit services provided by PricewaterhouseCoopers and is satisfied that the services and
the level of fees are compatible with maintaining auditors’ independence. All such services were approved by the Audit Committee in
accordance with pre-approved policies and procedures.
Other statutory assurance services relate to engagements required under prudential standards and other legislative or regulatory
requirements. Other assurance services include assurance and attestation relating to Pillar 3, climate and sustainability reporting,
comfort letters over financing programmes as well as agreed upon procedures.
Taxation services include assistance with tax return submissions and advice on tax legislation.
Other services include procedures over divestment completion accounts and benchmarking activities.
284
Notes to the Financial Statements
For the year ended 30 June 2024
285
CBA FINANCIAL REPORT
2024 Annual report
12.4
Subsequent events
The Directors have determined a fully franked final dividend of 250 cents per share amounting to $4,184 million.
Dividend Reinvestment Plan (DRP)
The Bank expects the DRP for the final dividend for the year ended 30 June 2024 will be satisfied in full by an on-market purchase of
shares of approximately $560 million based on historical DRP participation rate.
Share buy-back
On 14 August 2024, the Bank announced a 12 month extension of the on-market share buy-back of up to $1 billion of shares
announced on 9 August 2023 (of which $282 million was completed during the year ended 30 June 2024). The Bank reserves the right
to vary, suspend or terminate the buy-back at any time.
285
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Consolidated entity disclosure statement
286
The table below includes consolidated entity information required by section 295 of the Corporations Act 2001 (Cth):
Tax residency
Entity Registered Name
Entity Type
Place formed
or
incorporated
Percentage of
share capital
held (%)
Australian
or foreign
Foreign
jurisdiction
Aircraft MSN 37125 (Australia) Trust
Trust
N/A
N/A
Australia
N/A
Aircraft MSN 37129 (Australia) Trust
Trust
N/A
N/A
Australia
N/A
ASB Bank Limited
Body Corporate New Zealand
100.00
Foreign
New Zealand
ASB Cash Fund
Trust
N/A
N/A
Foreign
New Zealand
ASB Covered Bond Trust
Trust
N/A
N/A
Foreign
New Zealand
ASB Group Investments Limited
Body Corporate New Zealand
100.00
Foreign
New Zealand
ASB Holdings Limited
Body Corporate New Zealand
100.00
Foreign
New Zealand
ASB Management Services Limited
Body Corporate New Zealand
100.00
Foreign
New Zealand
ASB Nominees Limited
Body Corporate New Zealand
100.00
Foreign
New Zealand
ASB Securities Limited
Body Corporate New Zealand
100.00
Foreign
New Zealand
ASB Term Fund
Trust
N/A
N/A
Foreign
New Zealand
Asklepios Limited ¹
Body Corporate Australia
100.00
Australia
N/A
BW Financial Advice Pty Limited ¹
Body Corporate Australia
100.00
Australia
N/A
BWA Group Services Pty Ltd
Body Corporate Australia
100.00
Australia
N/A
BWA Intellectual Property Holdings Limited ¹
Body Corporate Australia
100.00
Australia
N/A
Capital 121 Pty Limited ¹
Body Corporate Australia
100.00
Australia
N/A
CBA A320 6749 Pty Limited
Body Corporate Australia
100.00
Australia
N/A
CBA A320 Aircraft No1 Pty Ltd
Body Corporate Australia
100.00
Australia
N/A
CBA A330 1561 Pty Ltd
Body Corporate Australia
100.00
Australia
N/A
CBA Aircraft Leasing 2 Pty Ltd
Body Corporate Australia
100.00
Australia
N/A
CBA B377 37091 Pty Ltd
Body Corporate Australia
100.00
Australia
N/A
CBA B738 39822 Pty Limited
Body Corporate Australia
100.00
Australia
N/A
CBA B773 60333 Pty Ltd
Body Corporate Australia
100.00
Australia
N/A
CBA Captive Insurance Pte. Ltd.
Body Corporate Singapore
100.00
Foreign
Singapore
CBA Corporate Services (NSW) Pty Limited
Body Corporate Australia
100.00
Australia
N/A
CBA Corporate Services (VIC) Pty Limited
Body Corporate Australia
100.00
Australia
N/A
CBA Covered Bond Trust
Trust
N/A
N/A
Australia
N/A
CBA ES Business Services Pty Ltd
Body Corporate Australia
100.00
Australia
N/A
CBA Europe Limited
Body Corporate United Kingdom 100.00
Foreign
United Kingdom
CBA Funding (NZ) Limited
Body Corporate New Zealand
100.00
Foreign
New Zealand
CBA Group Pty Limited
Body Corporate Australia
100.00
Australia
N/A
CBA Investments (No 4) Limited
Body Corporate New Zealand
100.00
Foreign
New Zealand
CBA New Digital Businesses Pty Ltd
Body Corporate Australia
100.00
Australia
N/A
CBA SAF Holding Pty Limited
Body Corporate Australia
100.00
Australia
N/A
CBA SAF UK Limited
Body Corporate United Kingdom 100.00
Foreign
United Kingdom
CBA Services International Limited
Body Corporate United Kingdom 100.00
Foreign
United Kingdom
CBA Services Private Limited
Body Corporate India
100.00
Foreign
India
CBA Specialised Financing Pty Limited
Body Corporate Australia
100.00
Australia
N/A
CBFC Leasing Pty Limited
Body Corporate Australia
100.00
Australia
N/A
286
287
CBA FINANCIAL REPORT
2024 Annual report
Tax residency
Entity Registered Name
Entity Type
Place formed
or
incorporated
Percentage of
share capital
held (%)
Australian
or foreign
Foreign
jurisdiction
CBFC Pty Limited
Body Corporate Australia
100.00
Australia
N/A
CMG Asia Life Holdings Limited ¹
Body Corporate Bermuda
100.00
Australia
N/A
CMG Asia Pty Ltd ¹
Body Corporate Australia
100.00
Australia
N/A
Colonial Holding Company Limited ¹
Body Corporate Australia
100.00
Australia
N/A
Colonial Services Pty Limited ¹
Body Corporate Australia
100.00
Australia
N/A
Commbank Foundation
Trust
N/A
N/A
Australia
N/A
Commbank Staff Foundation Limited ²
Body Corporate Australia
100.00
Australia
N/A
Commonwealth Australia Securities LLC
Body Corporate United States
100.00
Foreign
United States
Commonwealth Bank of Australia
Body Corporate Australia
N/A
Australia
N/A
Commonwealth Bank of Australia (Europe) N.V.
Body Corporate Netherlands
100.00
Foreign
Netherlands
Commonwealth Bank of Australia Share Plan
Trust
Trust
N/A
N/A
Australia
N/A
Commonwealth Bank Officers Superannuation
Corporation Pty Limited
Body Corporate Australia
100.00
Australia
N/A
Commonwealth Financial Planning Limited ¹
Body Corporate Australia
100.00
Australia
N/A
Commonwealth Insurance Holdings Limited ¹
Body Corporate Australia
100.00
Australia
N/A
Commonwealth Investments Pty Limited
Body Corporate Australia
100.00
Australia
N/A
Commonwealth Private Limited
Body Corporate Australia
100.00
Australia
N/A
Commonwealth Securities Limited
Body Corporate Australia
100.00
Australia
N/A
CommSec Custodial Nominees Pty Limited
Body Corporate Australia
100.00
Australia
N/A
Commwealth International Holdings Pty Limited ¹ Body Corporate Australia
100.00
Australia
N/A
Comsec Nominees Pty Limited
Body Corporate Australia
100.00
Australia
N/A
CPM Transform HoldCo Pty Limited
Body Corporate Australia
100.00
Australia
N/A
CTB Australia Limited
Body Corporate Hong Kong
100.00
Foreign
Hong Kong
Doshii Connect Pty Ltd
Body Corporate Australia
100.00
Australia
N/A
Financial Wisdom Limited ¹
Body Corporate Australia
100.00
Australia
N/A
Homepath Pty Limited ¹
Body Corporate Australia
100.00
Australia
N/A
Inverloch Leasing Pty Limited
Body Corporate Australia
99.00
Australia
N/A
IWL Broking Solutions Pty Limited ¹
Body Corporate Australia
100.00
Australia
N/A
Medallion NZ Series 2009-1R
Trust
N/A
N/A
Foreign
New Zealand
Medallion Trust Series 2008-1R
Trust
N/A
N/A
Australia
N/A
Medallion Trust Series 2013-2
Trust
N/A
N/A
Australia
N/A
Medallion Trust Series 2014-1
Trust
N/A
N/A
Australia
N/A
Medallion Trust Series 2014-1P
Trust
N/A
N/A
Australia
N/A
Medallion Trust Series 2014-2
Trust
N/A
N/A
Australia
N/A
Medallion Trust Series 2015-1
Trust
N/A
N/A
Australia
N/A
Medallion Trust Series 2015-2
Trust
N/A
N/A
Australia
N/A
Medallion Trust Series 2016-1
Trust
N/A
N/A
Australia
N/A
Medallion Trust Series 2016-2
Trust
N/A
N/A
Australia
N/A
Medallion Trust Series 2017-1
Trust
N/A
N/A
Australia
N/A
Medallion Trust Series 2017-1P
Trust
N/A
N/A
Australia
N/A
Medallion Trust Series 2017-2
Trust
N/A
N/A
Australia
N/A
287
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Consolidated entity disclosure statement (continued)
288
Tax residency
Entity Registered Name
Entity Type
Place formed
or
incorporated
Percentage of
share capital
held (%)
Australian
or foreign
Foreign
jurisdiction
Medallion Trust Series 2018-1
Trust
N/A
N/A
Australia
N/A
Medallion Trust Series 2018-1P
Trust
N/A
N/A
Australia
N/A
Medallion Trust Series 2019-1
Trust
N/A
N/A
Australia
N/A
Medallion Trust Series 2023-1
Trust
N/A
N/A
Australia
N/A
Medallion Trust Series 2023-2
Trust
N/A
N/A
Australia
N/A
Premium Custody Services Pty Ltd
Body Corporate
Australia
100.00
Australia
N/A
Residential Mortgage Group Pty Ltd
Body Corporate
Australia
100.00
Australia
N/A
SAF Corporate Services Pty Ltd ³
Body Corporate
Australia
100.00
Australia
N/A
Safe No 27 Pty Ltd
Body Corporate
Australia
100.00
Australia
N/A
Safe No23 Pty Ltd
Body Corporate
Australia
100.00
Australia
N/A
Safe No24 Pty Ltd
Body Corporate
Australia
100.00
Australia
N/A
Safe No4 Pty Limited
Body Corporate
Australia
100.00
Australia
N/A
Safe Usd Holdings Pty Ltd
Body Corporate
Australia
100.00
Australia
N/A
Securitisation Advisory Services Pty. Limited
Body Corporate
Australia
100.00
Australia
N/A
Securitisation Management Services Limited
Body Corporate
New Zealand
100.00
Foreign
New Zealand
Share Direct Nominees Pty Limited
Body Corporate
Australia
100.00
Australia
N/A
Share Investments Pty Limited
Body Corporate
Australia
100.00
Australia
N/A
State Nominees Limited
Body Corporate
Australia
100.00
Australia
N/A
Stichting CBA Carbon Custody Services
Body Corporate
Netherlands
100.00
Foreign
Netherlands
T.W. Custodians Limited
Body Corporate
Australia
100.00
Australia
N/A
The Colonial Mutual Life Assurance Society Pty
Limited ¹
Body Corporate
Australia
100.00
Australia
N/A
Vh-vzf Pty Ltd
Body Corporate
Australia
100.00
Australia
N/A
Vh-vzg Pty Ltd
Body Corporate
Australia
100.00
Australia
N/A
Vh-vzh Pty Ltd
Body Corporate
Australia
100.00
Australia
N/A
Waddle (Australia) Holdings Pty Limited
Body Corporate
Australia
100.00
Australia
N/A
Waddle Holdings Pty Ltd
Body Corporate
Australia
100.00
Australia
N/A
Waddle IP Pty. Ltd.
Body Corporate
Australia
100.00
Australia
N/A
Waddle Servicing Pty Ltd
Body Corporate
Australia
100.00
Australia
N/A
Wallaby Warehouse Trust No 1
Trust
N/A
N/A
Australia
N/A
Whitecoat Holdings Pty Ltd
Body Corporate
Australia
100.00
Australia
N/A
Whitecoat Operating Pty Ltd
Body Corporate
Australia
100.00
Australia
N/A
1 The Group’s consolidated entities include certain entities that are not actively trading and entities related to businesses divested and closed over recent years
(including divestments of CommInsure General Insurance, Colonial First State, CommInsure Life, Colonial First State Global Asset Management, PT Commonwealth
Life, Australian Investment Exchange Limited and assisted closure of Aligned Advice).
2 Commbank Staff Foundation Limited is the trustee for the Commbank Foundation Trust.
3 SAF Corporate Services Pty Ltd is the trustee for the Aircraft MSN 37125 (Australia) Trust and the Aircraft MSN 37129 (Australia) Trust.
288
Directors’ declaration
289
CBA FINANCIAL REPORT
2024 Annual report
The Directors of the Commonwealth Bank of Australia declare that:
In the opinion of the Directors:
(a)
The financial statements and notes for the year ended 30 June 2024, as set out on pages 136 to 285, are in accordance with
the Corporations Act 2001 (Cth), including:
i.
complying with the Australian Accounting Standards and any further requirements in the Corporations Regulations 2001;
and
ii.
giving a true and fair view of the Commonwealth Bank of Australia and the Group’s financial position as at 30 June 2024
and their performance for the year ended 30 June 2024.
(b)
The consolidated entity disclosure statement on pages 286 to 288 is true and correct.
(c)
There are reasonable grounds to believe that the Commonwealth Bank of Australia will be able to pay its debts as and when
they become due and payable.
Note 1.1 to the financial statements includes a statement of compliance with International Financial Reporting Standards.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001 (Cth) for the year ended 30 June
2024.
This declaration is made in accordance with a resolution of the Directors.
[SIGNATURE]
[SIGNATURE]
Paul O’Malley
Matt Comyn
Chairman
Managing Director and Chief Executive Officer
14 August 2024
14 August 2024
289
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, Sydney NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999
Liability limited by a scheme approved under Professional Standards Legislation.
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of the Commonwealth Bank of Australia (the Bank) and its controlled entities (together the
Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Bank’s and Group’s financial positions as at 30 June 2024 and of their financial
performance for the year then ended; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The financial report comprises:
• the Bank and Group Balance Sheets as at 30 June 2024
• the Bank and Group Statements of Comprehensive Income for the year then ended
• the Bank and Group Statements of Changes in Equity for the year then ended
• the Bank and Group Statements of Cash Flows for the year then ended
• the Bank and Group Income Statements for the year then ended
• the notes to the financial statements, including material accounting policy information and other explanatory information
• the Consolidated Entity Disclosure Statement as at 30 June 2024
• the Directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards and International Standards on Auditing. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Bank and the Group in accordance with the auditor independence requirements of the Corporations
Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of
Ethics for Professional Accountants (including Independence Standards) (the Code) and the International Code of Ethics for
Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board
for Accountants (IESBA Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code and the IESBA Code.
Independent auditor’s report
To the members of the Commonwealth Bank of Australia
Independent auditor’s report
290
Our audit approach for the Group
An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement.
Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report
as a whole, taking into account the geographic and management structure of the Bank and the Group, their accounting processes
and controls and the industries in which they operate.
Bank and Group Audit Scope
Our audit focused on where the Bank and the Group made subjective judgements; for example, significant accounting
estimates involving assumptions and inherently uncertain future events.
In designing the scope of our audit, we considered the structure of the Group which includes five business segments being
Retail Banking Services (RBS), Business Banking (BB), Institutional Banking and Markets (IB&M), New Zealand (NZ), and
Corporate Centre and Other. We also considered one significant business activity within these segments, being Group
Treasury. These business segments and the significant business activity are considered to be components as the Group
prepares financial information for their inclusion in the financial report.
The nature, timing and extent of audit work performed for each component was determined by each components’ risk
characteristics and financial significance to the Bank and the Group and consideration of whether sufficient evidence had been
obtained for our opinion on the financial report as a whole. This involved either:
• an audit of the financial information of a component (full scope);
• an audit of one or more of the component’s account balances, classes of transactions or disclosures (specified scope); or
• analytical procedures performed at the Bank and Group level and/or audit procedures performed at the Bank and Group
level, including over the consolidation of the Bank and Group’s components and the preparation of the financial report
(other procedures).
Set out in the following diagram is an overview of how our audit scope aligns to the identified components and our audit report.
Scoping and performance of procedures
Reporting
Component
Audit scope
Key Audit Matters
Auditor’s report
RBS
Full scope
Areas in our
professional
judgement which
were of most
significance
in our audit
Opinion on the
financial report
as a whole
BB
Full scope
IB&M
Full scope
NZ
Full scope
Group Treasury
Full scope
Corporate Centre
and Other 1
Other procedures
1 This excludes Group Treasury.
291
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report for the current period.
The key audit matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. Further, any commentary on the outcomes of a particular
audit procedure is made in that context. The key audit matters identified below relate to both the Bank and the Group audit,
unless otherwise stated below. We communicated the key audit matters to the Audit Committee.
Key audit matter
How our audit addressed the key audit matter
Provisions for loan impairment
AASB 9 Financial Instruments requires the recognition
of a Provision for Expected Credit Losses (ECL) against
the gross carrying value of the Bank’s and the Group’s
loans and other receivables, the measurement of which
is required to incorporate reasonable and supportable
information about past events, current conditions and
forecasts of future economic conditions.
The Bank and the Group utilise complex models to
calculate ECL on a collective basis. These models have
been developed using internal historical default data and
incorporate various forward-looking assumptions, such as
forecasts of future economic conditions across multiple
economic scenarios. In addition, judgemental adjustments
are applied to the modelled ECL outcomes (including
overlays and forward-looking adjustments).
Individually assessed provisions are also recognised by the
Bank and the Group for loans and other receivables that are
known to be impaired at the reporting date.
We considered the provision for ECL a key audit matter
due to the significant audit effort required and the inherent
estimation uncertainty present in its determination, which
is specifically due to the complexity, subjectivity and
extent of judgement used by the Bank and the Group in its
recognition and measurement.
We developed an understanding of the control activities
relevant to our audit over the Bank’s and the Group’s Provision
for ECL. For certain control activities, we assessed whether
they were appropriately designed and were operating
effectively, on a sample basis, throughout the year ended
30 June 2024. This included control activities relevant to:
• Completeness and accuracy of certain inputs to and outputs
from the ECL models;
• The accuracy of certain critical data elements used in ECL
models; and
• Review and approval of forward-looking assumptions, model
adjustments and overall adequacy of total Provisions for
ECL by the Bank’s and the Group’s Loan Loss Provisioning
Committee (LLPC).
In addition to controls testing we, along with PwC credit risk
modelling experts and PwC economics experts, performed
the following procedures, amongst others, to assess the
reasonableness of the Bank’s and the Group’s Provision for ECL
as at 30 June 2024:
• Assessed the appropriateness of the ECL model
methodology applied by the Bank and the Group for a
selection of the Bank’s and the Group’s loan portfolios, with
particular consideration to the results of model monitoring
performed for existing models, including back-testing
of observed losses against predicted losses, and model
validation for newly implemented models;
• Recalculated ECL to assess the accuracy of the modelled
outputs for a targeted sample of the Bank’s and the Group’s
loan portfolios;
292
Independent auditor’s report (continued)
Key audit matter
How our audit addressed the key audit matter
Provisions for loan impairment (continued)
Specific drivers of this uncertainty include the following:
• The models which are used to calculate ECL (ECL
models) are inherently complex and judgement is applied
in determining the appropriate construct of each model;
• Multiple assumptions are made by the Bank and the
Group concerning the future occurrence of events and
conditions, as well as their probabilities, for which there
is inherently heightened levels of estimation uncertainty
given the forward-looking nature of these assumptions;
• The determination of the need for and quantification of
adjustments to modelled assumptions and model outputs.
Relevant references in the financial report
Refer to notes 3.2 and 9.2 for further information.
• Assessed the appropriateness of certain forward-looking
assumptions incorporated into the ECL models, including the
macroeconomic scenarios developed, underlying forecasts
and probability weightings applied;
• Assessed the appropriateness of certain model adjustments
and overlays identified by the Bank and the Group;
• Tested the completeness and accuracy of a sample of
certain critical data elements used as inputs to the ECL
models, model adjustments and overlays to relevant source
documentation;
• Tested the appropriateness of individually assessed
provisions recognised by the Bank and the Group for a
selection of loan assets identified to be impaired as at the
reporting date; and
• Considered the impact of relevant events occurring after the
end of the financial year until the date of signing the auditor’s
report on the Provision for ECL.
Where applicable, we also considered the competency,
capabilities, objectivity and nature of the work of certain
experts used by the Bank and the Group to assist in the
development of relevant assumptions used in determining
the Provision for ECL.
We also assessed the reasonableness of the related disclosures
in the financial report against the requirements of Australian
Accounting Standards.
293
COMMONWEALTH BANK
2024 ANNUAL REPORT
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FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Key audit matter
How our audit addressed the key audit matter
Provisions for ongoing class actions
There are a number of class actions that have been brought
against the Bank and the Group. Significant judgement
is required to determine whether a provision is required
with regard to the requirements of AASB 137 Provisions,
Contingent Liabilities and Contingent Assets. Where a
provision has been recognised, there can be a high degree
of estimation uncertainty.
We consider the determination, valuation and disclosure of
these provisions to be a key audit matter due to the level of
judgement required in determining whether a provision is
required, the inherent estimation uncertainty in calculating
the appropriate amount of a provision, where required, and
the related disclosures within the financial report.
Relevant references in the financial report
Refer to note 7.1 for further information.
We developed an understanding of the control activities
relevant to our audit over the Bank’s and the Group’s provisions
for ongoing class actions, and for certain control activities,
assessed whether they were appropriately designed and
were operating effectively on a sample basis, throughout the
year ended 30 June 2024. We performed audit procedures
in relation to the following areas, amongst others, over the
determination, valuation and disclosure of the provisions for
ongoing class actions:
• Made inquiries of management and in-house legal counsel
in relation to the status of the class actions at the end of the
financial year;
• Inspected certain Board and other committee meeting
minutes and papers for any material developments in relation
to the class actions;
• Inspected legal representation letters from external
legal counsel for certain matters and evaluated the
responses received;
• Evaluated the Bank’s and the Group’s assessments as
to whether a provision was required with regard to the
requirements of Australian Accounting Standards; and
• Tested the valuation of the provisions recognised.
We also assessed the reasonableness of the related disclosures
in the financial report against the requirements of Australian
Accounting Standards.
294
Independent auditor’s report (continued)
Key audit matter
How our audit addressed the key audit matter
Operation of financial reporting Information Technology (IT) systems and controls
The Bank’s and the Group’s operations and financial
reporting processes are heavily dependent on IT systems
for the processing and recording of a significant volume
of transactions.
Due to this, we consider the operation of financial reporting
IT systems and controls to be a key audit matter.
In particular, in common with all banks, access rights
to technology are important because they are intended
to ensure that changes to IT applications and data are
appropriately authorised. Ensuring that only appropriate
staff have access to IT systems, that the level of access
itself is appropriate, and that access is periodically
monitored, are key controls in mitigating the potential
for fraud or error as a result of a change to an IT application
or underlying data.
The Bank and the Group have an ongoing multi-year strategic
program to address controls related to access management
for systems and data relevant to financial reporting.
For material financial statement balances, we developed an
understanding of the business processes, IT systems used
to generate and support those balances and associated IT
application controls and IT dependencies in IT dependent
manual controls.
Our procedures included evaluating and testing the design and
operating effectiveness of certain control activities over the
continued integrity of the material IT systems that are relevant
to financial reporting.
This involved assessing, where relevant to the audit:
• Change management: The processes and controls used to
develop, test and authorise changes to the functionality and
configurations within systems;
• System development: The project disciplines which ensure
that significant developments or implementation are
appropriately tested before implementation and that data is
converted and transferred completely and accurately;
• Security: The access controls designed to enforce
segregation of duties, govern the use of generic and
privileged accounts or ensure that data is only changed
through authorised means; and
• IT operations: The controls over operations are used to
ensure that any issues that arise are managed appropriately.
Within the scope of our audit, where technology services are
provided by a third party, we considered assurance reports
from the third party’s auditor on the design and operating
effectiveness of controls.
We also carried out tests, on a sample basis, of IT application
controls and IT dependencies in IT dependent manual controls
that were key to our audit testing in order to assess the
accuracy of certain system calculations, the generation of
certain reports and the operation of certain system enforced
access controls.
Where we identified design or operating effectiveness
matters relating to IT systems, IT application controls or IT
dependencies in IT dependent manual controls relevant to
our audit, we performed alternative audit procedures. We
also considered mitigating controls in order to respond to the
impact on our overall audit approach.
295
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual
report for the year ended 30 June 2024, but does not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form
of assurance conclusion thereon through our opinion on the financial report. We have issued a separate opinion on the
Remuneration report and a separate reasonable and limited assurance report on Selected Sustainability Information included
in the Sustainability performance section of the annual report.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report,
we conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Bank are responsible for the preparation of the financial report in accordance with Australian Accounting
Standards and the Corporations Act 2001 including giving a true and fair view and for such internal control as the directors
determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due
to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Bank and the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the Bank or the Group or to cease operations, or have no realistic alternative but
to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part
of our auditor’s report.
296
Independent auditor’s report (continued)
Report on the Remuneration report
Our opinion on the Remuneration report
We have audited the Remuneration report included in the Directors’ report for the year ended 30 June 2024.
In our opinion, the Remuneration report of the Commonwealth Bank of Australia for the year ended 30 June 2024 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Bank are responsible for the preparation and presentation of the Remuneration report in accordance with
section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration report, based on
our audit conducted in accordance with Australian Auditing Standards.
PricewaterhouseCoopers
Elizabeth O’Brien
Sydney
Partner
14 August 2024
297
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Security holder information
300
Top 20 holders of fully paid ordinary shares as at 30 June 2024
Rank
Name of holder
Number of shares
%
1
HSBC Custody Nominees
408,100,909
24.38%
2
J P Morgan Nominees Australia Limited
252,342,218
15.08%
3
Citicorp Nominees Pty Limited
109,210,490
6.53%
4
BNP Paribas Noms Pty Ltd
51,768,645
3.09%
5
National Nominees Limited
22,870,289
1.37%
6
Australian Foundation Investment
7,698,000
0.46%
7
Netwealth Investments Limited
7,085,405
0.42%
8
Australian Executor Trustees Limited
5,192,783
0.31%
9
Bond Street Custodians Limited
3,597,955
0.21%
10
Argo Investments Limited
2,703,731
0.16%
11
Mutual Trust Pty Ltd
1,816,770
0.11%
12
Invia Custodian Pty Limited
1,605,928
0.10%
13
McCusker Holdings Pty Ltd
1,370,000
0.08%
14
Custodial Services Limited
1,038,830
0.06%
15
IOOF Investment Services Ltd
1,016,860
0.06%
16
BKI Investment Company Limited
930,572
0.06%
17
Woodross Nominees Pty Ltd
873,847
0.05%
18
UBS Nominees Pty Ltd
869,864
0.05%
19
Australian United Investment Company Limited
645,000
0.04%
20
The Senior Master Of The Supreme Court
610,458
0.04%
The top 20 shareholders hold 881,348,554 shares which is equal to 52.66% of the total shares on issue.
Substantial shareholding
As at 13 August 2024 the following organisations have disclosed a substantial shareholding notice to the Australian Securities
Exchange (ASX).
Name
Number of
shares
Percentage of
voting power
BlackRock Group 1
106,300,321
6
State Street Corporation 2
101,418,394
6
Vanguard Group 3
85,093,294
5
1 Substantial shareholding as at 6 March 2020, as per notice lodged on 10 March 2020.
2 Substantial shareholding as at 8 April 2024, as per notice lodged on 10 April 2024.
3 Substantial shareholding as at 22 July 2022, as per notice lodged on 28 July 2022.
299
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Additional information contents
Additional information
Security holder information
299
Five-year financial summary
307
Profit reconciliation
310
Glossary of terms
312
Important notices
328
Contact us
329
298
301
CBA FINANCIAL REPORT
2024 Annual report
Stock exchange listing
The shares of the Commonwealth Bank of Australia (Bank) are listed on the ASX under the trade symbol of CBA.
Range of shares (fully paid ordinary shares and employee shares) as at 30 June 2024
Number of
Percentage of
Number of
Percentage of
Number of
Ranges
shareholders
shareholders
shares
issued capital
rights holders ¹
1–1,000
639,584
76.95
168,058,190
10.04
34
1,001–5,000
165,618
19.93
348,233,974
20.81
49
5,001–10,000
18,234
2.19
123,946,432
7.41
5
10,001–100,000
7,525
0.91
140,456,887
8.39
17
100,001–over
130
0.02
892,884,875
53.35
1
Total ²
831,091
100.00
1,673,580,358
100.00
106
Less than marketable parcel of $500 ³
10,001
1.20
17,381
–
–
1 The total number of rights on issue is 1,192,759 rights which carry no entitlement to vote.
2 During the year ended 30 June 2024, 1,143,154 shares were purchased on market at an average share price of $104.52 for the purpose of various CBA equity
settled share plans.
3 Based on a closing price of $127.38 on 28 June 2024.
Voting rights
Under the Bank’s Constitution, shareholders entitled to vote at a general meeting may vote in person, directly or by proxy, attorney or
representative, depending on whether the shareholder is an individual or a company.
Subject to any rights or restrictions attaching to shares, each ordinary shareholder present at a general meeting has, on a poll, one vote
for each fully paid share. If shares are not fully paid, on a poll the number of votes attaching to the shares is pro-rated accordingly. In
accordance with the Corporations Act 2001 (Cth), the provision in the Constitution providing for one vote on a show of hands is no
longer relevant, as general meeting resolutions will be conducted by a poll.
If a person at a general meeting represents personally or by proxy, attorney or official representative more than one shareholder, on a
show of hands the person is entitled to one vote only even though he or she represents more than one shareholder.
Where a shareholder appoints two proxies or attorneys to vote at the same general meeting:
• If the appointment does not specify the proportion or number of the shareholder’s votes each proxy or attorney may exercise, each
proxy or attorney may exercise half the shareholder’s votes;
• On a show of hands, neither proxy or attorney may vote if more than one proxy or attorney attends; and
• On a poll, each proxy or attorney may only exercise votes in respect of those shares or voting rights the proxy or attorney represents.
Security holder information (continued)
300
Security holder information (continued)
302
Top 20 holders of CommBank PERLS X Capital Notes (“PERLS X”) as at 30 June 2024
Rank
Name of holder
Number of
securities
%
1
BNP Paribas Noms Pty Ltd
1,615,514
11.84%
2
HSBC Custody Nominees
1,044,859
7.65%
3
Citicorp Nominees Pty Limited
496,722
3.64%
4
Australian Executor Trustees Limited
249,650
1.83%
5
Netwealth Investments Limited
245,717
1.80%
6
Invia Custodian Pty Limited
127,649
0.94%
7
J P Morgan Nominees Australia Limited
117,672
0.86%
8
Mutual Trust Pty Ltd
117,227
0.86%
9
Dimbulu Pty Ltd
100,000
0.73%
10
Marrosan Investments Pty Ltd
75,000
0.55%
11
Bond Street Custodians Limited
73,946
0.54%
12
Federation University Australia
59,620
0.44%
13
Eastcote Pty Ltd
50,000
0.37%
14
Harriette & Co Pty Ltd
50,000
0.37%
15
Mr Roni G Sikh
40,492
0.30%
16
Mrs Shane Carolyn Gluskie
40,000
0.29%
17
Pamdale Investments
36,000
0.26%
18
Ainsley Heath Investments Pty Ltd
35,500
0.26%
19
CF Equity Pty Ltd
34,630
0.25%
20
Mr Bradley Vincent Hellen + Mr Sean Patrick McMahon
32,000
0.23%
The top 20 PERLS X security holders hold 4,642,198 securities which is equal to 34.01% of the total securities on issue.
Stock exchange listing
PERLS X are perpetual subordinated unsecured notes issued by the Bank. They are listed on the ASX under the trade symbol CBAPG.
Range of securities (PERLS X) as at 30 June 2024
Number of
Percentage of
Number of
Percentage of
Ranges
security holders
security holders
securities
issued capital
1–1,000
12,391
87.97
4,323,232
31.67
1,001–5,000
1,497
10.63
3,276,722
24.01
5,001–10,000
133
0.94
988,881
7.24
10,001–100,000
55
0.39
1,490,544
10.92
100,001–over
10
0.07
3,570,621
26.16
Total
14,086
100.00
13,650,000
100.00
Less than marketable parcel of $500 ¹
7
0.05
11
–
1 Based on a closing price of $101.67 on 28 June 2024.
Voting rights
PERLS X do not confer any voting rights in the Bank but if they are exchanged for ordinary shares of the Bank in accordance with their
terms of issue, then the voting rights of the ordinary shares will be as set out on pages 299 and 300 for the Bank’s ordinary shares.
301
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
303
CBA FINANCIAL REPORT
2024 Annual report
Top 20 holders of CommBank PERLS XII Capital Notes (“PERLS XII”) as at 30 June 2024
Rank
Name of holder
Number of
securities
%
1
HSBC Custody Nominees
1,333,470
8.08%
2
Citicorp Nominees Pty Limited
885,254
5.37%
3
BNP Paribas Noms Pty Ltd
844,539
5.12%
4
Netwealth Investments Limited
454,292
2.75%
5
Australian Executor Trustees Limited
319,568
1.94%
6
Royal Freemasons Benevolent Institution
202,500
1.23%
7
Dimbulu Pty Ltd
200,000
1.21%
8
Tandom Pty Ltd
120,000
0.73%
9
Invia Custodian Pty Limited
109,099
0.66%
10
Bond Street Custodians Limited
106,642
0.65%
11
Diocese Development Fund - Catholic Diocese Of Parramatta
101,472
0.61%
12
Pamdale Investments
58,634
0.36%
13
Mutual Trust Pty Ltd
54,420
0.33%
14
QM Financial Services
53,500
0.32%
15
Tsco Pty Ltd
48,650
0.29%
16
Brujan Assets Pty Limited
45,000
0.27%
17
Mr Roni G Sikh
38,527
0.23%
18
Federation University Australia
30,650
0.19%
19
National Nominees Limited
30,351
0.18%
20
RL Thomson Pty Ltd
30,000
0.18%
The top 20 PERLS XII security holders hold 5,066,568 securities which is equal to 30.70% of the total securities on issue.
Stock exchange listing
PERLS XII are perpetual subordinated unsecured notes issued by the Bank. They are listed on the ASX under the trade symbol CBAPI.
Range of securities (PERLS XII) as at 30 June 2024
Number of
Percentage of
Number of
Percentage of
Ranges
security holders
security holders
securities
issued capital
1–1,000
15,629
87.47
5,718,522
34.66
1,001–5,000
2,029
11.36
4,162,912
25.23
5,001–10,000
132
0.74
952,899
5.78
10,001–100,000
63
0.35
1,402,374
8.50
100,001–over
15
0.08
4,263,293
25.83
Total
17,868
100.00
16,500,000
100.00
Less than marketable parcel of $500 ¹
6
0.03
12
–
1 Based on a closing price of $104.28 on 28 June 2024.
Voting rights
PERLS XII do not confer any voting rights in the Bank but if they are exchanged for ordinary shares of the Bank in accordance with their
terms of issue, then the voting rights of the ordinary shares will be as set out on pages 299 and 300 for the Bank’s ordinary shares.
Security holder information (continued)
302
Security holder information (continued)
304
Top 20 holders of CommBank PERLS XIII Capital Notes (“PERLS XIII”) as at 30 June 2024
Rank
Name of holder
Number of
securities
%
1
HSBC Custody Nominees
1,036,662
8.79%
2
BNP Paribas Noms Pty Ltd
925,886
7.85%
3
Citicorp Nominees Pty Limited
855,044
7.25%
4
Netwealth Investments Limited
284,256
2.41%
5
Australian Executor Trustees Limited
125,437
1.06%
6
Leda Holdings Pty Ltd
111,000
0.94%
7
Mutual Trust Pty Ltd
108,866
0.92%
8
Dimbulu Pty Ltd
100,000
0.85%
9
Royal Freemasons Benevolent Institution
100,000
0.85%
10
Nothman Pty Ltd
88,700
0.75%
11
Herbert St Investments Pty Ltd
84,000
0.71%
12
Valtellina Properties Pty Ltd
70,844
0.60%
13
Mrs Shane Carolyn Gluskie
40,000
0.34%
14
Bond Street Custodians Limited
38,014
0.32%
15
J P Morgan Nominees Australia Limited
36,725
0.31%
16
Federation University Australia
35,430
0.30%
17
Regents Garden Lake Joondalup
34,330
0.29%
18
Beverley Joyce Campbell
28,640
0.24%
19
The Trust Company (Australia) Limited
27,650
0.23%
20
Invia Custodian Pty Limited
25,432
0.22%
The top 20 PERLS XIII security holders hold 4,156,916 securities which is equal to 35.23% of the total securities on issue.
Stock exchange listing
PERLS XIII are perpetual subordinated unsecured notes issued by the Bank. They are listed on the ASX under the trade symbol
CBAPJ.
Range of securities (PERLS XIII) as at 30 June 2024
Number of
Percentage of
Number of
Percentage of
Ranges
security holders
security holders
securities
issued capital
1–1,000
11,167
89.05
4,001,123
33.91
1,001–5,000
1,219
9.72
2,621,249
22.21
5,001–10,000
98
0.78
683,823
5.80
10,001–100,000
46
0.37
1,404,439
11.90
100,001–over
10
0.08
3,089,366
26.18
Total
12,540
100.00
11,800,000
100.00
Less than marketable parcel of $500 ¹
2
0.02
7
–
1 Based on a closing price of $102.35 on 28 June 2024.
Voting rights
PERLS XIII do not confer any voting rights in the Bank but if they are exchanged for ordinary shares of the Bank in accordance with
their terms of issue, then the voting rights of the ordinary shares will be as set out on pages 299 and 300 for the Bank’s ordinary shares.
303
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
305
CBA FINANCIAL REPORT
2024 Annual report
Top 20 holders of CommBank PERLS XIV Capital Notes (“PERLS XIV”) as at 30 June 2024
Rank
Name of holder
Number of
securities
%
1
BNP Paribas Noms Pty Ltd
4,287,778
24.50%
2
HSBC Custody Nominees
1,237,042
7.07%
3
Citicorp Nominees Pty Limited
425,692
2.43%
4
Netwealth Investments Limited
406,207
2.32%
5
Dimbulu Pty Ltd
220,000
1.26%
6
Australian Executor Trustees Limited
165,039
0.94%
7
John E Gill Trading Pty Ltd
112,110
0.64%
8
Mutual Trust Pty Ltd
99,484
0.57%
9
Bond Street Custodians Limited
86,640
0.50%
10
Invia Custodian Pty Limited
85,638
0.49%
11
Pamdale Investments
66,756
0.38%
12
Fibora Pty Ltd
64,740
0.37%
13
Marrosan Investments Pty Ltd
50,000
0.29%
14
Limeburner Investments Pty Ltd
43,703
0.25%
15
National Nominees Limited
42,802
0.24%
16
Sir Moses Montefiore Jewish Home
40,010
0.23%
17
IOOF Investment Services Ltd
37,746
0.22%
18
J P Morgan Nominees Australia Limited
36,065
0.21%
19
Smart Super Investments Pty Ltd
30,050
0.17%
20
Leda Holdings Pty Ltd
29,930
0.17%
The top 20 PERLS XIV security holders hold 7,567,432 securities which is equal to 43.25% of the total securities on issue.
Stock exchange listing
PERLS XIV are perpetual subordinated unsecured notes issued by the Bank. They are listed on the ASX under the trade symbol
CBAPK.
Range of securities (PERLS XIV) as at 30 June 2024
Number of
Percentage of
Number of
Percentage of
Ranges
security holders
security holders
securities
issued capital
1–1,000
12,468
86.13
4,842,462
27.67
1,001–5,000
1,811
12.51
3,688,078
21.07
5,001–10,000
127
0.88
904,499
5.17
10,001–100,000
61
0.42
1,537,701
8.79
100,001–over
9
0.06
6,527,260
37.30
Total
14,476
100.00
17,500,000
100.00
Less than marketable parcel of $500 ¹
5
0.03
6
–
1 Based on a closing price of $102.19 on 28 June 2024.
Voting rights
PERLS XIV do not confer any voting rights in the Bank but if they are exchanged for ordinary shares of the Bank in accordance with
their terms of issue, then the voting rights of the ordinary shares will be as set out on pages 299 and 300 for the Bank’s ordinary shares.
Security holder information (continued)
304
Security holder information (continued)
306
Top 20 holders of CommBank PERLS XV Capital Notes (“PERLS XV”) as at 30 June 2024
Rank
Name of holder
Number of
securities
%
1
BNP Paribas Noms Pty Ltd
1,959,682
11.03%
2
HSBC Custody Nominees
1,487,083
8.37%
3
Citicorp Nominees Pty Limited
549,678
3.09%
4
Netwealth Investments Limited
434,237
2.44%
5
Australian Executor Trustees Limited
134,579
0.76%
6
Megt (Australia) Ltd
124,800
0.70%
7
Bond Street Custodians Limited
111,083
0.62%
8
National Nominees Limited
106,920
0.60%
9
Invia Custodian Pty Limited
106,045
0.60%
10
Jonwen Investments
105,000
0.59%
11
Mutual Trust Pty Ltd
94,285
0.53%
12
Limeburner Investments Pty Ltd
85,753
0.48%
13
Marrosan Investments Pty Ltd
85,000
0.48%
14
Royal Freemasons Benevolent Institution
82,000
0.46%
15
Willimbury Pty Ltd
70,673
0.40%
16
Pamdale Investments
56,441
0.32%
17
Cordale Holdings Pty Ltd
55,000
0.31%
18
Mifare Pty Ltd
55,000
0.31%
19
Jamber Investments Pty Ltd
50,000
0.28%
20
Uuro Pty Ltd
47,500
0.27%
The top 20 PERLS XV security holders hold 5,800,759 securities which is equal to 32.64% of the total securities on issue.
Stock exchange listing
PERLS XV are perpetual subordinated unsecured notes issued by the Bank. They are listed on the ASX under the trade symbol
CBAPL.
Range of securities (PERLS XV) as at 30 June 2024
Number of
Percentage of
Number of
Percentage of
Ranges
security holders
security holders
securities
issued capital
1–1,000
13,085
84.61
5,227,536
29.41
1,001–5,000
2,131
13.78
4,265,047
24.00
5,001–10,000
136
0.88
953,717
5.37
10,001–100,000
103
0.67
2,786,201
15.68
100,001–over
10
0.06
4,541,289
25.54
Total
15,465
100.00
17,773,790
100.00
Less than marketable parcel of $500 ¹
5
0.03
13
–
1 Based on a closing price of $102.18 on 28 June 2024.
Voting rights
PERLS XV do not confer any voting rights in the Bank but if they are exchanged for ordinary shares of the Bank in accordance with their
terms of issue, then the voting rights of the ordinary shares will be as set out on pages 299 and 300 for the Bank’s ordinary shares.
305
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
307
CBA FINANCIAL REPORT
2024 Annual report
Top 20 holders of CommBank PERLS XVI Capital Notes (“PERLS XVI”) as at 30 June 2024
Rank
Name of holder
Number of
securities
%
1
HSBC Custody Nominees
1,920,395
12.39%
2
BNP Paribas Noms Pty Ltd
709,714
4.58%
3
Citicorp Nominees Pty Limited
502,481
3.24%
4
Netwealth Investments Limited
404,862
2.61%
5
Bond Street Custodians Limited
226,727
1.46%
6
Tandom Pty Ltd
150,000
0.97%
7
Dimbulu Pty Ltd
100,000
0.65%
8
Mr John William Cunningham
95,970
0.62%
9
Higham Hill Pty Ltd
70,000
0.45%
10
Leda Holdings Pty Ltd
70,000
0.45%
11
Australian Executor Trustees Limited
65,039
0.42%
12
Acres Holdings Pty Ltd
50,000
0.32%
13
J P Morgan Nominees Australia Limited
48,081
0.31%
14
Colonial First State Inv Ltd
40,550
0.26%
15
John E Gill Trading Pty Ltd
40,128
0.26%
16
Anglicare Sa Ltd
40,000
0.26%
17
F&M Management Pty Ltd
40,000
0.26%
18
Kim An Pty Limited
40,000
0.26%
19
National Nominees Limited
39,639
0.26%
20
Seymour Group Pty Ltd
36,350
0.23%
The top 20 PERLS XVI security holders hold 4,689,936 securities which is equal to 30.26% of the total securities on issue.
Stock exchange listing
PERLS XVI are perpetual subordinated unsecured notes issued by the Bank. They are listed on the ASX under the trade symbol
CBAPM.
Range of securities (PERLS XVI) as at 30 June 2024
Number of
Percentage of
Number of
Percentage of
Ranges
security holders
security holders
securities
issued capital
1–1,000
11,955
84.79
4,704,951
30.35
1,001–5,000
1,893
13.43
4,103,636
26.48
5,001–10,000
163
1.16
1,190,670
7.68
10,001–100,000
82
0.58
2,021,916
13.04
100,001–over
6
0.04
3,478,827
22.45
Total
14,099
100.00
15,500,000
100.00
Less than marketable parcel of $500 ¹
1
0.01
3
–
1 Based on a closing price of $104.87 on 28 June 2024.
Voting rights
PERLS XVI do not confer any voting rights in the Bank but if they are exchanged for ordinary shares of the Bank in accordance with
their terms of issue, then the voting rights of the ordinary shares will be as set out on pages 299 and 300 for the Bank’s ordinary shares.
Relevant exchanges
In addition to the ASX, the Group has securities quoted on the London Stock Exchange (LSE), Swiss Exchange (SIX) and the New
Zealand Exchange (NZX).
Security holder information (continued)
306
Five-year financial summary
308
30 Jun 24
30 Jun 23 ¹
30 Jun 22 ¹
30 Jun 21
30 Jun 20
$M
$M
$M
$M
$M
Net interest income
22,824
23,056
19,473
19,302
19,015
Other operating income
4,350
4,079
5,126
4,646
4,746
Total operating income
27,174
27,135
24,599
23,948
23,761
Operating expenses
(12,218)
(11,858)
(11,428)
(11,151)
(10,996)
Loan impairment (expense)/benefit
(802)
(1,108)
357
(554)
(2,518)
Net profit before tax
14,154
14,169
13,528
12,243
10,247
Income tax expense
(4,318)
(4,097)
(4,014)
(3,590)
(3,022)
Net profit after tax from continuing operations ("cash
basis")
9,836
10,072
9,514
8,653
7,225
Net profit after tax from discontinued operations
11
18
113
148
182
Net profit after tax ("cash basis")
9,847
10,090
9,627
8,801
7,407
Hedging and IFRS volatility
17
(8)
108
7
93
(Loss)/gain on disposal of entities net of transaction costs
(470)
(84)
955
1,373
2,092
Net profit after income tax attributable to equity holders
of the Bank "statutory basis"
9,394
9,998
10,690
10,181
9,592
Contributions to profit (after tax)
Retail Banking Services
5,355
5,542
5,194
4,693
4,029
Business Banking
3,774
3,624
2,734
2,836
2,570
Institutional Banking and Markets
1,097
1,048
1,068
933
635
New Zealand
1,194
1,320
1,265
1,161
809
Corporate Centre and Other
(1,584)
(1,462)
(747)
(970)
(818)
Net profit after tax from continuing operations ("cash
basis")
9,836
10,072
9,514
8,653
7,225
Balance Sheet
Loans and other receivables
942,210
926,082
878,854
811,356
772,980
Total assets
1,254,076
1,252,423
1,215,082
1,091,975
1,015,484
Deposits and other public borrowings
882,922
864,995
857,586
766,381
703,432
Total liabilities
1,180,988
1,180,790
1,142,397
1,013,287
943,576
Shareholders' equity
73,088
71,633
72,685
78,688
71,908
Net tangible assets (including discontinued operations)
65,488
64,235
65,746
71,041
64,307
Risk weighted assets – Basel III (APRA)
467,551
467,992
497,892
450,680
454,948
Average interest earning assets
1,144,357
1,111,254
1,026,910
929,846
897,409
Average interest bearing liabilities
971,466
918,666
841,695
776,967
771,982
Assets (on Balance Sheet) – Australia
1,044,500
1,044,401
1,012,316
926,909
856,651
Assets (on Balance Sheet) – New Zealand
117,351
118,192
112,433
110,104
103,523
Assets (on Balance Sheet) – Other
92,225
89,830
90,333
54,962
55,310
1 Comparative information for 2023 and 2022 has been revised to reflect the change detailed in Note 1.1.
307
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
309
CBA FINANCIAL REPORT
2024 Annual report
30 Jun 24
30 Jun 23 ¹
30 Jun 22 ¹
30 Jun 21
30 Jun 20
Shareholder summary from continuing operations
Earnings per share
Basic
Statutory
(cents)
566.6
597.5
557.0
499.2
417.8
Cash basis
(cents)
587.8
596.1
552.4
488.5
408.5
Fully diluted
Statutory
(cents)
562.7
584.2
537.1
470.6
404.8
Cash basis
(cents)
582.6
582.8
532.9
460.7
396.1
Shareholder summary including discontinued operations
Earnings per share
Basic
Statutory
(cents)
561.4
591.7
620.7
574.8
542.4
Cash basis
(cents)
588.4
597.2
559.0
496.9
418.8
Fully diluted
Statutory
(cents)
557.8
578.7
597.0
539.7
521.0
Cash basis
(cents)
583.2
583.8
539.0
468.4
405.7
Dividends per share – fully franked
(cents)
465
450
385
350
298
Dividend cover – statutory
(times)
1.2
1.3
1.6
1.6
1.8
Dividend cover – cash
(times)
1.3
1.3
1.5
1.4
1.4
Dividend payout ratio
Statutory
(%)
83
76
61
61
55
Cash basis
(%)
79
75
68
71
71
Net tangible assets per share including discontinued
operations
($)
39.1
38.3
38.6
40.0
36.3
Weighted average number of shares (statutory
basis)
(M)
1,673
1,690
1,722
1,771
1,768
Weighted average number of shares (statutory fully
diluted)
(M)
1,784
1,800
1,833
1,934
1,895
Weighted average number of shares (cash basis)
(M)
1,673
1,690
1,722
1,771
1,769
Weighted average number of shares (cash fully
diluted)
(M)
1,784
1,800
1,833
1,934
1,896
Number of shareholders ²
831,091
861,636
873,764
871,514
888,214
Share prices for the year
Trading high
($)
128.68
111.43
110.19
106.57
91.05
Trading low
($)
96.15
89.66
86.98
62.64
53.44
End (closing price)
($)
127.38
100.27
90.38
99.87
69.42
1 Comparative information for 2023 and 2022 has been revised to reflect the change detailed in Note 1.1.
2 Includes employees.
Five-year financial summary (continued)
308
Five-year financial summary (continued)
310
30 Jun 24
30 Jun 23 ¹
30 Jun 22 ¹
30 Jun 21
30 Jun 20
Performance ratios from continuing operations
Return on average Shareholders' Equity
Statutory
(%)
13.1
14.0
12.7
11.8
10.4
Cash basis
(%)
13.6
13.9
12.6
11.5
10.2
Return on average total assets
Statutory
(%)
0.7
0.8
0.8
0.9
0.7
Cash basis
(%)
0.8
0.8
0.8
0.8
0.7
Net interest margin
(%)
1.99
2.07
1.90
2.08
2.12
Performance ratios including discontinued operations
Return on average Shareholders' Equity
Statutory
(%)
13.0
13.8
14.2
13.5
13.5
Cash basis
(%)
13.6
14.0
12.8
11.7
10.5
Return on average total assets
Statutory
(%)
0.7
0.8
0.9
1.0
1.0
Cash basis
(%)
0.8
0.8
0.8
0.8
0.7
Capital adequacy – Common Equity Tier 1 – Basel
III (APRA)
(%)
12.3
12.2
11.5
13.1
11.6
Capital adequacy – Tier 1 – Basel III (APRA)
(%)
14.3
14.5
13.6
15.7
13.9
Capital adequacy – Tier 2 – Basel III (APRA)
(%)
6.6
5.5
4.0
4.1
3.6
Capital adequacy – Total – Basel III (APRA)
(%)
20.9
20.0
17.6
19.8
17.5
Leverage Ratio Basel III (APRA)
(%)
5.0
5.1
5.2
6.0
5.9
Liquidity Coverage Ratio – "Quarterly average"
(%)
136
131
130
129
155
Net interest margin
(%)
1.99
2.07
1.90
2.08
2.12
Other information
Full-time equivalent employees from continuing operations
48,887
49,454
48,906
44,019
41,778
Full-time equivalent employees including discontinued
operations
48,887
49,454
48,906
45,833
43,585
Branches/services centres (Australia)
709
741
807
875
967
Agencies (Australia)
3,445
3,491
3,526
3,535
3,547
ATMs
1,916
1,956
2,095
2,492
3,542
EFTPOS terminals (active)
209,861
206,188
189,977
203,938
190,118
Productivity from continuing operations ²
Total operating income per full-time equivalent
employee
($)
555,853
548,692
502,985
544,038
568,744
Employee expense/total operating income
(%)
27.6
26.4
26.8
25.3
24.2
Total operating expenses/total operating income
("cash basis")
(%)
45.0
43.7
46.5
46.6
46.3
Productivity including discontinued operations ²
Total operating income per full-time equivalent
employee
($)
556,689
550,136
510,785
539,131
568,361
Employee expense/total operating income
(%)
27.5
26.4
26.7
25.4
24.5
Total operating expenses/total operating income
("cash basis")
(%)
45.0
43.8
46.5
47.4
47.4
1 Comparative information for 2023 and 2022 has been revised to reflect the change detailed in Note 1.1.
2 The productivity metrics have been calculated on a cash basis.
309
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Profit reconciliation
311
CBA FINANCIAL REPORT
2024 Annual report
Full year ended 30 Jun 2024
Net profit
after tax
"cash basis"
Gain/(loss) on
disposal and
acquisition of
controlled
entities ¹
Hedging
and IFRS
volatility
Net profit
after tax
"statutory
basis"
Profit reconciliation
$M
$M
$M
$M
Group
Interest income ²
61,044
–
–
61,044
Interest expense
(38,220)
–
–
(38,220)
Net interest income
22,824
–
–
22,824
Net other operating income
4,350
(271)
18
4,097
Total operating income
27,174
(271)
18
26,921
Operating expenses
(12,218)
(119)
–
(12,337)
Loan impairment expense
(802)
–
–
(802)
Net profit/(loss) before tax
14,154
(390)
18
13,782
Income tax (expense)/benefit
(4,318)
18
(1)
(4,301)
Net profit/(loss) after income tax from continuing operations
9,836
(372)
17
9,481
Net profit/(loss) after income tax from discontinued operations
11
(98)
–
(87)
Net profit/(loss) after income tax
9,847
(470)
17
9,394
1 These amounts include post-completion adjustments (such as purchase price adjustments, and finalisation of accounting adjustments for goodwill and foreign
currency reserves recycling), and transaction and separation costs associated with the previously announced divestments.
2 Interest income includes total effective interest income and other interest income.
310
Profit reconciliation (continued)
312
Full year ended 30 Jun 2023 ¹
Net profit
after tax
"cash basis"
Gain/(loss) on
disposal and
acquisition of
controlled
entities ²
Hedging
and IFRS
volatility
Net profit
after tax
"statutory
basis"
Profit reconciliation
$M
$M
$M
$M
Group
Interest income ³
44,475
–
–
44,475
Interest expense
(21,419)
–
–
(21,419)
Net interest income
23,056
–
–
23,056
Net other operating income
4,079
292
1
4,372
Total operating income
27,135
292
1
27,428
Operating expenses
(11,858)
(221)
–
(12,079)
Loan impairment expense
(1,108)
–
–
(1,108)
Net profit before tax
14,169
71
1
14,241
Income tax expense
(4,097)
(39)
(9)
(4,145)
Net profit/(loss) after income tax from continuing operations
10,072
32
(8)
10,096
Net profit/(loss) after income tax from discontinued operations
18
(116)
–
(98)
Net profit/(loss) after income tax
10,090
(84)
(8)
9,998
1 Information has been revised to reflect the change detailed in Note 1.1.
2 These amounts include post-completion adjustments (such as purchase price adjustments, and finalisation of accounting adjustments for goodwill and foreign
currency reserves recycling), and transaction and separation costs associated with the previously announced divestments.
3 Interest income includes total effective interest income and other interest income.
311
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Term
Definition
Absenteeism
Absenteeism refers to the average number of sick leave days taken (and carer’s leave days
for CommSec employees) during the reporting period per Australia-based full-time equivalent
employee including Bankwest. Colonial First State is included up to 1 December 2021, after which
time our divestment from the business was complete. This is the Criteria for the accompanying
Selected Sustainability Information assured by PwC to a limited assurance level.
Absolute emissions
GHG emissions, expressed in terms of weight of CO2 (e.g. tCO2) or weight of CO2 equivalent
(e.g. tCO2-e) for a given scope/s.
Age diversity
Percentage of permanent employees (full-time, part-time, job share or on extended leave), casuals,
employees on international assignment and contractors paid directly by the Group, by age group as
at 30 June. Excludes ASB businesses in New Zealand. PT Bank Commonwealth (PTBC) is included
up to 30 April 2024, after which time our divestment from this business was complete. This is the
Criteria for the accompanying Selected Sustainability Information assured by PwC to a limited
assurance level.
ASB customers
The number of customers who have a relationship with ASB New Zealand, as at 30 June.
A customer is defined as anyone who holds an open account. Includes retail and non-retail
customers and deceased estates.
Assets under
management (AUM)
Assets under management represent the market value of assets for which the Group acts as an
appointed manager.
AUSTRAC
Australian Transaction Reports and Analysis Centre
Australian
Indigenous supplier
spend (Direct)
Direct (first tier) supplier spend (GST-inclusive) includes any approved invoice (including grants)
from an Indigenous enterprise during the reporting period. To meet the definition of an Indigenous
enterprise, the enterprise must be at least 50% Indigenous-owned. It includes any approved invoices
from an Indigenous enterprise that is; registered or certified by Supply Nation, listed by the Office
of the Registrar of Indigenous Corporations, listed by an Indigenous Chamber of Commerce, that
provides a Certificate of Indigeneity or a Statutory Declaration that the business is 50% or more
Indigenous-owned. This is the Criteria for the accompanying Selected Sustainability Information
assured by PwC to a limited assurance level.
Australian
Indigenous supplier
spend (Directed)
Directed Indigenous Supplier Spend for FY24 includes spend with four Indigenous enterprises
through a first tier non-Indigenous supplier (agents) where the Bank has requested spend with the
Indigenous supplier (principal) and the transaction can be verified. This metric is calculated based
on the actual amount (GST inclusive) spent with the Indigenous supplier (principal). To meet the
definition of an Indigenous enterprise, the enterprise must be at least 50% Indigenous-owned.
It includes any approved invoices from an Indigenous business that is: registered or certified by
Supply Nation, listed by the Office of the Registrar of Indigenous Corporations (ORIC), listed by an
Indigenous Chamber of Commerce (ICC), that provides a Certificate of Indigeneity or a Statutory
Declaration that the business is 50% or more Indigenous-owned. This is the Criteria for the
accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
Bank of the Year
Digital Banking
CBA won Canstar’s Bank of the Year – Digital Banking award for 2024 (for the 15th year in a row).
Awarded June 2024.
Bankwest
customers
The number of customers who have a relationship with Bankwest, as at 30 June. A customer
is defined as anyone who holds an open account. Includes, retail and non-retail customers and
deceased estates.
Best Digital
Consumer
Bank (Major)
CBA was awarded the ‘Best Digital Consumer Bank (Major)’ (for the sixth year in a row) by RFI
Global’s Banking & Finance Awards 2024. Presented June 2024.The award is based on information
collected from the RFI Global Atlas research program, using feedback from over 80,000 business
and/or retail customers from January through to December 2023.
Board
The Board of Directors of the Commonwealth Bank of Australia.
312
Glossary of terms
Term
Definition
Business MFI share
RFI Global Atlas Business Main Financial Institution (MFI) Share. Data on a six month roll weighted
to the Australian business population. MFI Customer Share is the proportion of all businesses with
any business banking, that nominate the Financial Institution (FI) as their main financial institution.
Share based on grouped brands as follows: CBA Group includes CBA and Bankwest, ANZ Group
includes ANZ, NAB Group includes NAB, Westpac Group includes Westpac, St George, BankSA
and Bank of Melbourne.
CBA customers
The number of customers who have a relationship with the Commonwealth Bank of Australia,
as at 30 June. A customer is defined as anyone who is currently associated with an open account
as either the owner, joint owner, trustee or primary cardholder. Includes retail, non-retail customers
and deceased estates. This is the Criteria for the accompanying Selected Sustainability Information
assured by PwC to a limited assurance level.
CommBank app
customers
The total number of customers that have logged into the CommBank mobile app at least once in the
month of June. This is the Criteria for the accompanying Selected Sustainability Information assured
by PwC to a limited assurance level from FY24.
Common Equity Tier
1 Capital (CET1)
The highest quality of capital available to the Group reflecting the permanent and unrestricted
commitment of funds that are freely available to absorb losses. It comprises ordinary share capital,
retained earnings and reserves less prescribed deductions.
Community
investment – cash
contributions
Total funds contributed by the Group (excluding Aussie Home Loans) during the reporting period
through donations, charitable gifts, community partnerships and matched giving. Matched giving
excludes staff contributions. All amounts are verified transactions, inclusive of GST where applicable,
with the exception of donations and charitable gift transactions which are exempt from GST. PT
Bank Commonwealth (PTBC) is included up to 30 April 2024 and Colonial First State is included up
to 1 December 2021, after which time our divestment from these businesses was complete. This is
the Criteria for the accompanying Selected Sustainability Information assured by PwC to a limited
assurance level.
Community
investment –
forgone revenue
Forgone revenue consists of the aggregate value of fee-free or discounted CBA products and
services related to transacting accounts during the reporting period, to a range of customers
including youth, students, young adults, government benefit recipients, not-for-profit organisations
and older people. This metric relates to monthly account fee and transaction fees and contains some
assumptions to estimate the number of active accounts with forgone revenue. This metric does
not include discounts on interest rates or revenue forgone as part of CBA’s Emergency Assistance
Packages. Certain transaction fee waivers are excluded from forgone revenue estimates. This is
the Criteria for the accompanying Selected Sustainability Information assured by PwC to a limited
assurance level.
Community
investment
– program
management costs
Total costs incurred by the Group to implement and manage community investment programs
including the Indigenous Customer Assistance Line (ICAL) contact centre, Next Chapter, Women
in Focus, school programs as well as other not-for-profit activities during the reporting period.
These costs include salary and wages, occupancy, IT and other expenditure. Amounts include
approved invoices (including grants) to a registered Australian Indigenous business – refer to
Australian Indigenous supplier spend. All amounts are verified transactions, inclusive of GST where
applicable, with the exception of transactions which are exempt from GST. This is the Criteria for the
accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
Community
investment – value
of time volunteering
Total estimated dollar value of volunteering hours contributed by Australia-based CBA and
Bankwest employees during the reporting period, excluding terminated employees. Volunteering
activities include pro bono (skilled) and general (unskilled) volunteering, as captured in the Group’s
leave management system (Workday) and by volunteering managers. Average hourly rates are
calculated using Australia-based permanent employees’ salaries as at 30 June, excluding the
salaries of the Board, the CEO, Group Executives and offshore employees. In FY21, the methodology
for calculating the employee hourly rate changed. FY20 has not been restated. Colonial First State is
included up to 1 December 2021, after which time our divestment from the business was complete.
This is the Criteria for the accompanying Selected Sustainability Information assured by PwC to a
limited assurance level.
313
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Term
Definition
Community
investment
as a percentage
of cash net profit
before tax
Total community investment as a percentage of the Group’s cash net profit from continuing
operations before tax during the reporting period. This is the Criteria for the accompanying Selected
Sustainability Information assured by PwC to a limited assurance level.
Conduct captured
by The Banking
Industry Conduct
Background Check
Protocol
The Australian Banking Association (ABA) Conduct Background Check Protocol was implemented in
June 2017 and assists the ABA’s member organisations when hiring to find out information about a
job applicant’s past employment history and conduct record. The ABA Protocol sets out a series of
fact-based questions an ABA subscriber can ask another ABA subscriber about a candidate to help
identify any past employment history of misconduct in accordance with the protocol.
Corporations Act
Corporations Act 2001 (Cth).
Cost-to-income
ratio
Represents operating expenses as a percentage of total operating income. The ratio is a key efficiency
measure.
Cultural diversity
The proportion of Australia-based employees who disclosed that they have culturally diverse ancestry
in the Group’s annual people and culture survey. Participation and disclosure in the survey is voluntary
and can vary from year-to-year. Cultural diversity is defined in the Australian context as anyone with
an ancestry other than Anglo-Celtic (Australia, British, Irish or New Zealander).
Cultural diversity
index (CDI)
The concentration mix of all cultures of the Group’s employees resulting in an index between 0 and
1, where the higher the score, the more diverse the population. CDI is calculated using demographic
information disclosed in the Group’s annual people and culture survey and benchmarked against
the ancestry question in the 2021 Australian Census. Participation and disclosure in the survey is
voluntary and can vary from year-to-year. The CDI excludes ASB businesses in New Zealand, and
businesses in Indonesia.
Customer
complaints
– received
The number of complaints received by the Group during the reporting period, as recorded in the
FirstPoint feedback management system, managed via our Internal Dispute Resolution process.
Resolution timeliness reports on proportion of complaints resolved within five working days.
Includes Bankwest and CBA/Colonial First State (CFS) or Commonwealth Insurance Limited (CIL)
commingled complaints or complaints related to the sale and distribution of CFS/CIL products. CFS is
included up to 1 December 2021, after which time our divestment from the business was complete.
Excludes ASB businesses in New Zealand and other overseas operations. This is the Criteria for the
accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
Data breaches
reported to the
OAIC
Root causes of data breaches as defined by the Privacy Regulator (Office of the Australian
Information Commissioner). The number of reportable data breaches reported by the Group to the
OAIC during the reporting period. Data breaches are notifiable under the Privacy Act 1988 (Cth) and
include incidents arising from human error, system fault, and malicious or criminal attack. This is
the Criteria for the accompanying Selected Sustainability Information assured by PwC to a limited
assurance level from FY24.
Deferred shares
Awarded from the 2019 financial year, deferred shares are ordinary shares in CBA, which are
restricted until vesting and used for deferred STVR arrangements and sign-on awards. These equity
awards are subject to forfeiture if the Executive ceases to be employed by the Group prior to the
vesting date as a result of resignation or serious misconduct, Board risk and reputation review and,
malus and clawback provisions.
Digitally active
customers
The total number of customers who have logged into a core digital asset (NetBank or CommBank
mobile app) at least once in the month of June. This is the Criteria for the accompanying Selected
Sustainability Information assured by PwC to a limited assurance level from FY24.
Dividend payout
ratio (“cash basis”)
Dividends paid on ordinary shares divided by net profit after tax (“cash basis”).
Dividend payout ratio
(“statutory basis”)
Dividends paid on ordinary shares divided by net profit after tax (“statutory basis”).
314
Glossary of terms (continued)
Term
Definition
DPS
Dividends per share.
DRP
Dividend reinvestment plan.
DRP participation
The percentage of total issued capital participating in the dividend reinvestment plan.
E&S Framework
The E&S Framework provides a reference point for our people and stakeholders on the minimum
standards we seek to abide by, the targets we seek to implement, and the governance and oversight
in place to support our endeavours. Our E&S Framework is underpinned by our internal Group
Environmental and Social Policy and relevant business unit specific procedures. Our E&S Framework
is available at commbank.com.au/policies.
Earnings per share
(EPS) (basic)
Basic earnings per share is the net profit attributable to ordinary equity holders of the Bank, divided
by the weighted average number of ordinary shares on issue during the year per the requirements of
relevant accounting standards.
Earnings per share
(EPS) (diluted)
Diluted earnings per share adjusts the net profit attributable to ordinary equity holders of the
Bank and the weighted average number of ordinary shares on issue used in the calculation of basic
earnings per share, for the effects of dilutive potential ordinary shares per the requirements of
relevant accounting standards.
Electricity
consumption
– property and fleet
Purchased electricity used for ATMs, retail, commercial, electric vehicle fleet, residential and data
centre properties during the reporting period, under the Group’s operational control in Australia;
including two data centres under non-operational control. The data is based on a combination of
invoiced amounts and estimates based on historical information or pro-rata consumption. This is
the Criteria for the accompanying Selected Sustainability Information assured by PwC to a limited
assurance level.
Electricity
generated from
on-site solar panels
Comprised of solar energy consumed in the generation of electricity from solar photovoltaic panels
installed on CBA and Bankwest branches in Australia that is equal to the amount generated. In
FY24 there were approximately 83 branches with solar panels installed. This is the Criteria for the
accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
Embodied carbon
The carbon emissions associated with materials and construction processes throughout the lifecycle
of a building. Includes carbon released during extraction, manufacturing, transportation of materials,
and construction practices used to construct the building.
Employee training
Average completed training hours per employee recorded in CBA’s learning management system
(PeopleLink) as at 30 June, measured by headcount. Training hours are allocated to each training
item including face-to-face or online training and excludes external training and video training.
Executive Managers, General Managers, Executive General Managers and the Chief Executive
Officer are included in ‘Executive Managers and above’ and ‘Others’ includes team managers
and team members. This metric excludes the training completion rates of the employees of ASB
businesses in New Zealand. This is the Criteria for the accompanying Selected Sustainability
Information assured by PwC to a limited assurance level.
Employee turnover
– involuntary
Refers to all involuntary exits of permanent employees during the reporting period as a percentage
of the average permanent headcount paid directly by the Group (full-time, part-time, job share or on
extended leave), excluding ASB businesses in New Zealand. Involuntary exits include redundancies
and terminations for disciplinary reasons. This is the Criteria for the accompanying Selected
Sustainability Information assured by PwC to a limited assurance level.
Employee turnover
– voluntary
Refers to all voluntary exits of permanent employees during the reporting period as a percentage
of the average permanent headcount paid directly by the Group (full-time, part-time, job share or
on extended leave), excluding non-permanent employees and ASB businesses in New Zealand.
Voluntary exits are determined to be resignations and retirements. This is the Criteria for the
accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
315
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Term
Definition
Employees who
have accessed
parental leave
Number of employees eligible for parental leave benefits who had started primary or secondary
carer parental leave during the reporting period, as recorded in the Group’s human resources system.
Excludes ASB businesses in New Zealand and employees of discontinued operations. This is the
Criteria for the accompanying Selected Sustainability Information assured by PwC to a limited
assurance level.
Employees who
have returned from
parental leave and
are still employed
after 12 months
The proportion of employees who returned to work from a period of primary or secondary carer
parental leave in the prior year and were still employed after 12 months within the reporting
period, as recorded in the Group’s human resources system. Excludes employees that returned to
a major business or subsidiary that is now a discontinued operation. Excludes ASB businesses in
New Zealand.
Employees
who identify
as LGBTQIA+
The proportion of employees who disclosed that they identify as Lesbian, Gay, Bisexual, Transgender,
Queer, Intersex, Asexual (LGBTQIA), non-binary/gender diverse or other in the Group’s annual people
and culture survey. Participation and disclosure in the survey is voluntary and can vary from year-to-
year. Bankwest included from September 2020. Businesses in China and Singapore included from
September 2021. Excludes ASB businesses in New Zealand, and businesses in Indonesia. This is
the Criteria for the accompanying Selected Sustainability Information assured by PwC to a limited
assurance level.
Employees
with caring
responsibilities
The proportion of employees who selected one or more of the caring responsibility options (including,
but not limited to, caring for elderly, children, people with disability, chronic conditions, etc.) in the
Group’s annual people and culture survey. Participation and disclosure in the survey is voluntary and can
vary from year-to-year. Bankwest is included from September 2020. Excludes ASB businesses in New
Zealand. This is the Criteria for the accompanying Selected Sustainability Information assured by PwC
to a limited assurance level.
Employees with
disability, chronic
illness or other
medical condition
The proportion of employees who disclosed that they have a disability, chronic illness or other medical
condition in the Group’s annual people and culture survey. Participation and disclosure in the survey
is voluntary and can vary from year-to-year. Bankwest and businesses in Indonesia are included from
September 2020. Excludes ASB businesses in New Zealand. This is the Criteria for the accompanying
Selected Sustainability Information assured by PwC to a limited assurance level.
Employees
working flexibly
The proportion of employees who disclosed that they used one or more of the flexible work options
in the previous 12 months in the Group’s annual people and culture survey. Participation and
disclosure in the survey is voluntary and can vary from year-to-year. Bankwest and businesses in
China are included from September 2020. Businesses in Indonesia are included from September
2021. Excludes ASB businesses in New Zealand. This is the Criteria for the accompanying Selected
Sustainability Information assured by PwC to a limited assurance level.
Employment type
(headcount)
The number of Australian employees as at 30 June who are permanent employees working in
full-time, part-time or casual positions, including job share or on extended leave. It excludes ASB
businesses in New Zealand, fixed term contractors and contingent workers. This is the Criteria for
the accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
Escalated
complaints
to an external
dispute resolution
(EDR) scheme
The number of complaints escalated to an EDR scheme for the Group during the reporting period.
This includes complaints that have been through the Bank’s Internal Dispute Resolution (IDR)
process, then escalated to an EDR scheme. These complaints are recorded in FirstPoint and
managed by the Group Customer Relations and/or Customer Care teams. EDR schemes include,
but are not limited to the Australian Financial Complaints Authority (AFCA) and the Office of the
Australian Information Commissioner (OAIC). Includes Bankwest and CBA/Colonial First State (CFS)
or Commonwealth Insurance Limited (CIL) commingled complaints or complaints related to the sale
and distribution of CFS/CIL products. CFS is included up to 1 December 2021, after which time our
divestment from the business was complete. Excludes ASB businesses in New Zealand and other
overseas operations. This is the Criteria for the accompanying Selected Sustainability Information
assured by PwC to a limited assurance level.
ESG
Environmental, social and governance.
316
Glossary of terms (continued)
Term
Definition
ESG bond
arrangement
The full value of all Green, Social, Sustainability, Sustainability-Linked and Transition Bonds
arranged during the 12 months ended 30 June, in which CBA acted as Global Coordinator, Manager/
Bookrunner or Lead Arranger. The roles and ESG label classification have been defined in the Term
Sheet documentation and confirmed by Bloomberg with an ‘ESG tag’. Private placements aligned
with International Capital Market Association principles are included. This is the Criteria for the
accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
ESG training
completed
(headcount)
The number of CBA and Bankwest employees who have completed ESG training modules, measured
by headcount, as recorded in the Bank’s learning management system (PeopleLink) as at 30 June.
Excludes ASB businesses in New Zealand. This is the Criteria for the accompanying Selected
Sustainability Information assured by PwC to a limited assurance level.
Executive Leadership
Team (ELT)
The team comprises of the CEO and individuals in the following executive groups: Group Executives
and CEO ASB.
Executives
Collective term referring to the individuals in the following executive groups: CEO, Group Executives
and CEO ASB.
Financed emissions
The emissions financed by a financial institution’s loans and/or investments. They are estimated
based on an attributed proportion of the financial institution’s customers’ emissions. These financed
emissions are part of the financial institution’s Scope 3, Category 15 emissions.
Financial
Independence
Hub (participants
supported)
An individual who has received meaningful support, interactions or assistance within the Financial
Independence program. This might include, but is not limited to, financial coaching, financial
counselling, providing advice, information or education on domestic and family violence and/or
financial abuse, referrals to other services within Good Shepherd or to external agencies, or support
with tasks. A participant can receive one or more services.
Full-time equivalent
employees (FTE)
(page 52)
Total FTE of the Group by geographical work locations as at 30 June. FTE includes full-time, part-
time, job share employees, employees on extended leave and contractors. One full-time role is equal
to 38 working hours per week. New Zealand category refers to ASB employees only. CBA staff based
in New Zealand are captured under ‘Other’. India FTE prior to FY22 are captured under ‘Other’. PT
Bank Commonwealth (PTBC) is included up to 30 April 2024 and Colonial First State is included up
to 1 December 2021, after which time our divestment from these businesses was complete. This is
the Criteria for the accompanying Selected Sustainability Information on Total FTE assured by PwC
to a limited assurance level.
Gender pay equity
– female to
male base
salary comparison
Gender pay equity is defined as the ratio of the weighted average base salary of males and females
for Australia-based employees of the Group, as at 31 March. The data reflects roles in similar
functions, role scope and responsibilities. The data refers to permanent employees who are full-
time, part-time, job sharing or on extended leave. It excludes the CEO, Board members, contractors,
casual employees, seconded employees and employees who have not responded with a defined
gender. This is the Criteria for the accompanying Selected Sustainability Information assured by
PwC to a limited assurance level.
Graduates
The number of graduates who accepted and commenced in a graduate position with CBA or
Bankwest during the reporting period. Graduate positions commence in February each year. This is
the Criteria for the accompanying Selected Sustainability Information assured by PwC to a limited
assurance level.
Greenhouse
gases (GHGs)
Greenhouse gases (GHGs) are the six gases listed in the Kyoto Protocol being carbon dioxide (CO2),
methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and
sulphur hexafluoride (SF6).
Greenhouse
gas emissions
The production and/or release of greenhouse gas emissions.
Greenhouse
Gas Protocol
Greenhouse gas protocol establishes comprehensive global standardized frameworks to measure
and manage greenhouse gas (GHG) emissions from private and public sector operations, value
chains and mitigation actions.
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Term
Definition
Greenhouse
gas emissions:
Exclusions and
reclassifications
From FY20 onwards:
1. CBA assumed operational control of two data centres. Emissions from these locations have been
reclassified from selected Scope 3 to Scope 1 or 2 emissions, depending on source.
2. Scope 1 includes refrigerant emissions.
3. Selected Scope 3 includes additional emissions from waste, water, work from home and freight.
From FY22 onwards:
1. Aussie Home Loans data is excluded due to divestment.
2. From December 2021, Colonial First State data is excluded due to divestment.
3. Selected Scope 3 includes additional emissions from the production of annual reports.
From FY23 onwards:
1. Selected Scope 3 includes additional emissions from annual general meeting and
employee commuting.
From FY24 onwards:
1. Scope 2 includes additional emissions from electricity usage from offsite ATMs and electric
vehicle charging (Australia and India).
2. Selected Scope 3 includes waste data from data centres under the Group’s operational
control (Australia).
3. PT Bank Commonwealth (PTBC) is included up to 30 April 2024, after which time our divestment
of the business was complete.
Emissions factor
A figure provided by a credible third party that provides an estimated amount of CO2 emitted for a
specific activity (e.g. emissions per barrel of oil combusted). These can be multiplied with production
figures to estimate emissions.
Location-based
emissions
reporting
Reflects the Group’s emissions in the context of its location, on which the consumption/activity
for Scope 1, Scope 2 and selected Scope 3 emissions occur. This does not consider renewable
electricity procurement represented by the retirement of eligible renewable attribute certificates.
Market-based
emissions
reporting
(Australia)
Reflects the large generation certificates (LGCs) purchases redeemed against the electricity used
for ATMs, electric vehicle fleet, retail, commercial, residential and data centre properties in Australia
under CBA’s operational control.
Market-based
emissions
reporting
(New Zealand)
Reflects the renewable energy certificates (RECs) purchases redeemed against electricity used for
retail, corporate and data centre properties under ASB’s operational control.
Market-based
emissions
reporting (India)
Reflects the energy attribute certificates (EACs) purchases redeemed against electricity used
for the commercial property and electric vehicle fleet in India under CBA’s operational control.
Market-based
emissions
reporting
(Other Overseas)
Reflects the energy attribute certificates (EACs) purchases redeemed against estimated electricity
used for the Other Overseas commercial properties.
Scope 1
emissions
Relates to the Group’s consumption of natural gas, stationary fuel and refrigerants used in retail,
commercial and data centre properties under the Group’s operational control, and business use of
tool-of-trade vehicles, during the reporting period. The consumption data is based on a combination
of invoiced amounts and estimates based on historical information or pro-rata consumption.
Emissions are calculated using the relevant emissions factors noted in the ‘Scope 1, Scope 2 and
selected Scope 3 emissions’ regional definitions. This is the Criteria for the accompanying Selected
Sustainability Information assured by PwC to a reasonable assurance level in FY24.
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Glossary of terms (continued)
Term
Definition
Scope 2
emissions
Emissions from the Group’s electricity used by ATMs, retail, commercial, fleet, residential and data
centre properties under the Group’s operational control during the reporting period. The consumption
data is based on a combination of invoiced amounts and estimates based on historical information
or pro-rata consumption. Emissions are calculated using the relevant emission factors noted in the
regional definitions below. This is the Criteria for the accompanying Selected Sustainability Information
assured by PwC to a reasonable assurance level in FY24.
Selected Scope 3
emissions
Indirect greenhouse gas emissions as a result of sources outside the Group’s operational control, but
support the Group’s business activities during the reporting period. The consumption data is based
on a combination of invoiced amounts and estimates based on historical information or pro-rata
consumption/activity. Emissions are calculated using the relevant emission factors noted in the
regional definitions below. Selected Scope 3 emissions currently do not cover all categories of the
GHG Protocol; however, it is the Bank’s intention to align in the future with the Protocol and disclose
relevant categories. This is the Criteria for the accompanying Selected Sustainability Information
assured by PwC to a limited assurance level.
Scope 1,
Scope 2 and
selected Scope
3 emissions –
Australia
Australian emissions are based on emission factors sourced from the Climate Active Carbon
Neutral Standard (2023), National Greenhouse Accounts Factors (2023) and the Department for
Environment, Food and Rural Affairs (United Kingdom) (2022).
Scope 1 and Scope 2 emissions sources for Australia included diesel stationary, natural gas, electric
vehicle fleet, transport fuels, refrigerants and purchased electricity during the reporting period.
The consumption data is based on a combination of invoiced amounts and estimated based on
historical information or pro-rata consumption. This is the Criteria for the accompanying Selected
Sustainability Information assured by PwC to a reasonable assurance level from FY24.
Selected Scope 3 emissions sources for Australia included CBA’s annual general meeting, annual
report production, freight, office paper (photocopy), water, base building electricity and natural
gas, diesel stationary, natural gas, emissions associated with electricity at data centres not under
CBA’s operational control, transmission and distribution losses, fleet, waste, hotel accommodation,
flights, fuel expensed, hire car, taxi use, employee commuting and work from home emissions
during the reporting period. The consumption data is based on a combination of invoiced amounts
and estimated based on historical information or pro-rata consumption. This is the Criteria for the
accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
Scope 1,
Scope 2 and
selected Scope
3 emissions –
New Zealand
New Zealand emission factors are sourced from Ministry for the Environment NZ, Measuring
Emissions: A Guide for Organisations (2024). Exceptions where emission factors are from different
sources include Scope 3 Freight (Postage: NZ Post FY23 emission factors, Courier: Auckland Council
spend based emissions factor (year ending 2019, Postal and Courier Services), adjusted for inflation)
and Scope 3 Paper (Environment Protection Authority Victoria (2021)).
Scope 1 and Scope 2 emissions sources for New Zealand included diesel stationary, natural gas, fleet
transport fuels, refrigerants and purchased electricity during the reporting period. The consumption
data is based on a combination of invoiced amounts and estimated based on historical information or
pro-rata consumption. This is the Criteria for the accompanying Selected Sustainability Information
assured by PwC to a reasonable assurance level in FY24.
Selected Scope 3 emissions sources for New Zealand included freight, office paper (photocopy),
transmission and distribution losses, waste, hotel accommodation, flights, fuel expensed, hire car,
taxi use and work from home emissions during the reporting period. The consumption data is based
on a combination of invoiced amounts and estimated based on historical information or pro-rata
consumption. This is the Criteria for the accompanying Selected Sustainability Information assured by
PwC to a limited assurance level.
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OVERVIEW
Term
Definition
Scope 1, Scope
2 and selected
Scope 3
emissions – India
India emissions are based on emission factors sourced from International Energy Agency (2022
and 2023), National Greenhouse Accounts Factors (Australia, 2023), IPCC Fifth Assessment
Report (2014), Climate Active Carbon Neutral Standard (Australia, 2023) and the Department for
Environment, Food and Rural Affairs (United Kingdom, 2023).
Scope 1 and Scope 2 emissions sources for India included diesel stationary, refrigerants and
purchased electricity during the reporting period. The consumption data is based on a combination
of invoiced amounts and estimated based on historical information or pro-rata consumption. This is
the Criteria for the accompanying Selected Sustainability Information assured by PwC to a limited
assurance level.
Selected Scope 3 emissions sources for India included freight, office paper (photocopy), water,
base building electricity, diesel stationary, transmission and distribution losses, fleet, waste, hotel
accommodation, flights, hire car, employee commuting and work from home emissions during the
reporting period. Employee commuting and work from home emissions are estimated by multiplying
the Australian employee commuting and work from home emissions per FTE as at 30 June by the
numbers of FTEs in India. The consumption data is based on a combination of invoiced amounts
and estimated based on historical information or pro-rata consumption. This is the Criteria for the
accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
Scope 1,
Scope 2 and
selected Scope
3 emissions –
Other overseas
Other overseas emissions are estimated by multiplying the Australian Scope 1, Scope 2 and selected
Scope 3 emissions per FTE as at 30 June by the number of FTEs of all the Group’s other overseas
offices. PTBC (Indonesia) FTE taken as per divested date. This is the Criteria for the accompanying
Selected Sustainability Information assured by PwC to a limited assurance level.
Group
Commonwealth Bank of Australia and its subsidiaries.
Group Executive (GE)
Members of the Executive Leadership Team (excludes the CEO and the CEO ASB).
Hardship approvals
Total number of CBA hardship approvals during the reporting period for retail accounts across
home loans, personal loans and credit cards. A hardship account is defined as an account where the
customer takes up an approved hardship solution, due to financial hardship, owing (but not limited)
to reasons such as unemployment/underemployment, health, relationship breakdown, and over
committed. Excludes written off accounts and life arrangements. Excludes Bankwest and ASB New
Zealand. This is the Criteria for the accompanying Selected Sustainability Information assured by
PwC to a limited assurance level from FY24.
Headcount
Total number of employees, including permanent headcount (full-time, part-time, job share, on
extended leave), and contractors (fixed term arrangements) paid directly by the Group as at 30
June. Excludes contingent workers. PT Bank Commonwealth (PTBC) is included up to 30 April 2024
and Colonial First State is included up to 1 December 2021, after which time our divestment from
these businesses was complete. This is the Criteria for the accompanying Selected Sustainability
Information assured by PwC to a limited assurance level.
Health, safety and
wellbeing training
Number of employees who completed health, safety and wellbeing training, as recorded in the
Group’s learning management system (PeopleLink) as at 30 June, measured by headcount. Excludes
ASB businesses in New Zealand. This is the Criteria for the accompanying Selected Sustainability
Information assured by PwC to a limited assurance level.
Indigenous cultural
development
(training
completion rate)
Percentage of employees, in relation to total headcount, who have completed Indigenous cultural
development, as recorded in the Group’s learning management system (PeopleLink) as at 30 June.
Indigenous cultural development programs included are: Indigenous cultural awareness e-learning;
Providing banking services to First Nations customers e-learning; or BlackCard Cultural Learning
Program. Includes CBA and Bankwest domestic employees. Excludes ASB businesses in New Zealand
and other overseas operations. This is the Criteria for the accompanying Selected Sustainability
Information assured by PwC to a limited assurance level.
Indigenous
Customer
Assistance Line
(calls received)
Number of calls received from retail customers via the dedicated Indigenous Customer Assistance
Line (ICAL) during the reporting period. It excludes calls that were abandoned by CBA retail
customers. Excludes Bankwest. This is the Criteria for the accompanying Selected Sustainability
Information assured by PwC to a limited assurance level.
320
Glossary of terms (continued)
Term
Definition
Indigenous
workforce (ancestry)
Represents the proportion of employees who disclosed that they most strongly identify with Australian
Aboriginal and/or Torres Strait Islander ancestry in the Group’s annual people and culture survey.
Participation and disclosure in the survey is voluntary and can vary from year-to-year. Bankwest
included from September 2020. From September 2022, the data represents the proportion of
Australia-based employees only. Aboriginal and Torres Strait Islander representation in Australia is
based on the 2021 Australian Census. This is the Criteria for the accompanying Selected Sustainability
Information assured by PwC to a limited assurance level.
In-scope drawn
lending
Drawn lending which excludes exposures in the finance and insurance, and government
administration and defence ANZSICs. Portfolios not assessed include consumer finance (excluding
Australian motor vehicle finance) and commercial property outside of Australia and New Zealand.
Interest rate risk in
the banking book
(IRRBB)
Interest rate risk in the banking book is the risk that the Bank’s profit derived from Net Interest
Income (interest earned less interest paid), in current and future periods, is adversely impacted
by changes in interest rates. This is measured from two perspectives: firstly by quantifying the
change in the net present value of the balance sheet’s future earnings potential, and secondly as the
anticipated change to net interest income earned over 12 months. This calculation is driven by APRA
regulations with further detail outlined in the Group’s Basel III Pillar 3 report.
Long-term
alignment
remuneration (LTAR)
Remuneration that is subject to pre-grant and pre-vest assessments and vests subject to service
conditions after a period of four and five years for the CEO, and four years for Group Executives and
CEO ASB.
Long-term variable
remuneration
(LTVR)
Variable remuneration subject to service conditions and performance measures over four years.
From FY23, LTVR awards that remain on foot following satisfaction of service conditions and
performance measures are restricted until completion of a risk and compliance review after a further
holding period of two years for the CEO and one year for Group Executives and CEO ASB.
Lost time injury
frequency rate
(LTIFR)
LTIFR is the reported number of occurrences of lost time arising from injury or disease that have
resulted in an accepted workers compensation claim during the reporting period, for each million hours
worked by Australia and New Zealand employees. The metric captures claims relating to permanent,
casual and fixed-term contractors paid directly by the Group. It is reported using the information
available as at 30 June. Prior year numbers have been restated due to claims received after year-end
reporting date. This metric includes data for the now divested Colonial First State business covering
the period up to 30 November 2021. These records pertain to workers that were employed by CBA at
the time, and CBA retains some legal obligations as an employer for that period. This is the Criteria for
the accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
Misconduct
cases resulting
in termination
This metric represents closed substantiated misconduct cases which resulted in termination and were
managed in Australia by the Workplace Relations team, SpeakUP team and/or Group Investigations
team during the reporting period. The metric excludes incidents reported by local associates and joint
ventures. There are various internal policies within the Group that govern staff conduct obligations, such
as the ‘Code of Conduct’ which is the guiding framework at CBA. Colonial First State is included up to
1 December 2021, after which time our divestment from the business was complete. This is the Criteria
for the accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
Most Innovative
Major Consumer
Bank
CBA was awarded the ‘Most Innovative Major Consumer Bank’ (for the 6th year in a row) by RFI
Global’s Banking & Finance Awards 2024. Presented June 2024. The award is based on information
collected from the RFI Global Atlas research program, using feedback from over 80,000 business
and/or retail customers from January through to December 2023.
Natural capital
The stock of renewable and non-renewable natural resources (e.g., plants, animals, air, water, soils
and minerals) that combine to yield a flow of benefits to people, organisations (including financial
institutions) and the environment.
Nature
The natural world, with an emphasis on the diversity of living organisms (including people) and their
interactions among themselves and with their environment.
Net profit after
tax (NPAT)
(“cash basis”)
Represents net profit after tax and non-controlling interests before non-cash items including
hedging and IFRS volatility, and gains or losses on acquisitions, disposal, closure, capital repatriation
and demerger of controlled businesses, or associates that are not discontinued operations. This is
management’s preferred measure of the Group’s financial performance.
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Term
Definition
Net profit after
tax (NPAT)
(“statutory basis”)
Represents net profit after tax and non-controlling interests, calculated in accordance with
Australian Accounting Standards. This is equivalent to the statutory item “Net profit attributable to
Equity holders of the Bank”.
Net Promoter Score
(NPS)
For the major banks, NPS is reported for main brand only. “Net Promoter®, NPS®, NPS Prism®, and
the NPS-related emoticons are registered trademarks of Bain & Company, Inc., NICE Systems, Inc.,
and Fred Reichheld. Net Promoter ScoreSM and Net Promoter SystemSM are service marks of Bain
& Company, Inc., NICE Systems, Inc., and Fred Reichheld.” NPS refers to customer likelihood to
recommend their main financial institution using a scale from 0–10 (where 0 is ‘not at all likely’ and
10 is ‘extremely likely’) and NPS is calculated by subtracting the percentage of Detractors (scores
0–6) from the percentage of Promoters (scores 9–10).
Net Stable Funding
Ratio (NSFR)
The NSFR more closely aligns the behaviour terms of assets and liabilities. It is the ratio of the
amount of available stable funding (ASF) to the amount of required stable funding (RSF). ASF
is the portion of an Authorised Deposit-taking Institution’s (ADI) capital and liabilities expected
to be a reliable source of funds over a one-year time horizon. RSF is a function of the liquidity
characteristics and residual maturities of an ADI’s assets and off Balance Sheet activities.
Net tangible assets
per share
Net assets excluding intangible assets, non-controlling interests and other equity instruments divided
by ordinary shares on issue at the end of the period (excluding Treasury Shares deduction). Right of
use assets are included in net tangible assets per share.
New Zealand
New Zealand refers to ASB Banking Group which includes the banking and funds management
business. ASB Banking Group provides a range of banking, wealth and insurance products and
services to personal, business, rural and corporate customers in New Zealand
Next Chapter
and Community
Wellbeing (customer
interactions)
The total number of interactions with individuals, including non-CBA customers, in vulnerable
circumstances supported by the Next Chapter and Community Wellbeing team during the reporting
period. The channels are: calls answered; internal and external vulnerability referrals; asynchronous
chat opened conversations via the CommBank App; and outbound contacts made to support
customers who received abusive messages via transaction descriptions. Excludes ASB businesses in
New Zealand. This is the Criteria for the accompanying Selected Sustainability Information assured by
PwC to a limited assurance level.
NPS – ASB
– Consumer
Retail Market Monitor NPS measures the net likelihood of recommendation to others of the
customer’s main financial institution. Using a scale of 1 to 10 (1 means ‘extremely unlikely’ and 10
means ‘extremely likely’), the 1–6 raters (detractors) are deducted from the 9–10 raters (promoters).
Twelve-month rolling average data is used. The ranking refers to ASB’s position relative to the other
four main New Zealand banks.
NPS – ASB
– Business
and rural banking
Business Finance Monitor NPS measures the net likelihood of recommendation to others of the
business or rural customer’s main financial institution. Using a scale of 1 to 10 (1 means ‘extremely
unlikely’ and 10 means ‘extremely likely’), the 1–6 raters (detractors) are deducted from the 9–10
raters (promoters). Four-quarter rolling average data is used. The ranking refers to ASB’s position
relative to the other three main New Zealand banks.
NPS – Bankwest
– Consumer
RFI-DBM Atlas Consumer Main Financial Institution (MFI) NPS (refer to definition for Net Promoter
Score). Based on Australian population aged 14+ years old, rating their likelihood to recommend their
MFI. NPS results are shown as a six-month rolling average. NPS is reported for each brand, therefore
Commonwealth Bank of Australia excludes Bankwest, and Westpac excludes St George, BankSA
and Bank of Melbourne. Bankwest ranking is based on the following nine banks: CBA, ANZ, Westpac,
NAB, Adelaide/Bendigo Bank, Suncorp, Bankwest, Bank of Queensland and St George. NPS ranks
are based on absolute scores among reported banks and not statistically significant differences.
NPS – CBA
– Business
RFI Global Atlas Business MFI NPS. Based on Australian businesses rating their likelihood to
recommend their MFI for Business Banking. NPS results are shown as a six-month rolling average.
NPS ranks are based on simple comparisons of scores among major banks, not statistically
significant differences. NPS is reported for each brand, therefore Commonwealth Bank of Australia
excludes Bankwest and ASB Banking Group.
322
Glossary of terms (continued)
Term
Definition
NPS – CBA
– Consumer
RFI Global Atlas Consumer MFI NPS. Based on Australian population aged 14+ years old rating
their likelihood to recommend their MFI. NPS results are shown as a six-month rolling average. NPS
ranks are based on simple comparisons of scores among major banks, not statistically significant
differences. NPS is reported for each brand, therefore Commonwealth Bank of Australia excludes
Bankwest and ASB Banking Group.
NPS – CBA
– Consumer mobile
banking app
RFI Global Atlas Consumer MFI Mobile Banking App NPS: Based on MFI customers rating their
likelihood to recommend their MFI’s Mobile Banking App used in the last four weeks. NPS results are
shown as a six-month rolling average. NPS ranks are based on simple comparisons of scores among
major banks, not statistically significant differences. NPS is reported for each brand, therefore
Commonwealth Bank of Australia excludes Bankwest and ASB Banking Group.
NPS – CBA
– Consumer
online banking
RFI Global Atlas Consumer MFI Online Banking NPS: Based on MFI customers rating their likelihood
to recommend their MFI’s Online Banking used in the last four weeks. NPS results are shown
as a six-month rolling average. NPS ranks are based on simple comparisons of scores among
major banks, not statistically significant differences. NPS is reported for each brand, therefore
Commonwealth Bank of Australia excludes Bankwest and ASB Banking Group.
NPS – Institutional
RFI Global Atlas Institutional $300 million plus Business MFI NPS: Based on Australian businesses
with an annual revenue of $300 million or more for the previous financial year rating their likelihood
to recommend their MFI for Business Banking. NPS results are shown as a twelve-month rolling
average. NPS ranks are based on simple comparisons of scores among major banks, not statistically
significant differences. NPS is reported for each brand, therefore Commonwealth Bank of Australia
excludes Bankwest and ASB Banking Group.
Office paper
usage (retail
and commercial
operations)
Office paper used in retail and commercial operations under the Group’s operational control. Invoiced
reams of paper are used to estimate usage by weight. This is the Criteria for the accompanying
Selected Sustainability Information assured by PwC to a limited assurance level.
Operational
emissions
Scope 1, 2 and selected Scope 3 emissions (excluding financed emissions) resulting from the
operations of our business for the Commonwealth Bank of Australia Group, including ASB Banking
Group and other overseas operations.
Other overseas
Represents amounts booked in branches and controlled entities outside Australia, New Zealand
and India.
Paris Agreement
The Paris Agreement, adopted within the United Nations Framework Convention on Climate Change
in December 2015, commits all participating countries to limit global temperature rise to well below
2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C, to adapt to changes
already occurring, and to regularly increase efforts over time.
PCAF
Partnership for Carbon Accounting Financials. A global partnership of financial institutions that
work together to develop and implement a harmonised approach to assess and disclose the GHG
emissions associated with their loans and investments.
People engagement
index – CBA
The People Engagement Index (PEI) measures how engaged our people are, including feelings of
personal accomplishment and advocacy of the organisation. The PEI was refreshed in February
2024 from a five-item metric to a two-item metric to reduce the length of the Group’s quarterly
people and culture survey and time taken to complete, without compromising insights about
engagement or the reliability of the PEI measure. PEI is calculated based on the proportion of
employees replying with a score of 4 or 5 to two engagement questions in the Group’s quarterly
people and culture survey. These questions are rated on a scale of 1 to 5 (where 1 is ‘Strongly
Disagree’ and 5 is ‘Strongly Agree’). Participation and disclosure in the survey is voluntary and can
vary from year-to-year. Bankwest included from September 2020. PT Bank Commonwealth (PTBC)
is included up to 30 April 2024, after which time our divestment from this business was complete.
Excludes ASB businesses in New Zealand. This is the Criteria for the accompanying Selected
Sustainability Information assured by PwC to a limited assurance level.
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Term
Definition
Performance rights
Performance rights to ordinary shares in CBA granted under the LTVR and subject to the
satisfaction of performance measures and service conditions.
Phishing sites
taken down
The number of phishing sites identified impersonating Group branding (CommBank, Commonwealth
Bank, CommBiz, CommSec, NetBank and CBA Group) and taken down by a third-party vendor during
the reporting period. This is the Criteria for the accompanying Selected Sustainability Information
assured by PwC to a limited assurance level from FY24.
Physical risks
Risks arising from extreme weather events (acute) such as floods, bushfires and cyclones, and longer
term (chronic) shifts in precipitation and temperature and increased variability in weather patterns, such
as sea level rise.
Privacy complaints
Number of privacy related complaints escalated to the Office of the Australian Information
Commissioner (OAIC) or Australian Financial Complaints Authority (AFCA) for the Group during the
reporting period. This includes complaints that have been through the Bank’s Internal Dispute Resolution
(IDR) process and have escalated to an External Dispute Resolution (EDR) scheme. These complaints
are recorded in FirstPoint and are managed by the Group Customer Relations and/or Customer Care
team. Includes Bankwest and CBA/Colonial First State (CFS) or Commonwealth Insurance Limited (CIL)
commingled complaints or complaints related to the sale and distribution of CFS/CIL products. CFS is
included up to 1 December 2021, after which time our divestment from the business was complete.
Excludes ASB businesses in New Zealand and other overseas operations. This is the Criteria for the
accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
Profit after capital
charge (PACC)
The Group uses PACC, a risk-adjusted measure, as a key measure of financial performance. It takes into
account the profit achieved, the risk to capital that was taken to achieve it, and other adjustments.
RAP
Reconciliation Action Plan.
Renewable
electricity
procurement
The usage of electricity for operations within Australia, New Zealand and Other Overseas generated
via renewable sources in compliance with CBA’s RE100 commitment. Addressed through the
procurement of Large Generation Certificates (LGCs) or Renewable Energy Certificates (RECs) in
local and/or regional jurisdictions for the reporting period. This is the Criteria for the accompanying
Selected Sustainability Information assured by PwC to a limited assurance level. For ASB, this metric
is not assured by PwC.
% of renewable
electricity procurement
(Australia, New
Zealand, India,
Other Overseas)
The percentage of renewable electricity procured for operations within Australia, New Zealand, India
and Other Overseas. This is the Criteria for the accompanying Selected Sustainability Information
assured by PwC to a limited assurance level. For ASB, this metric is not assured by PwC.
Renewable
electricity
purchased
Comprised of renewable electricity purchased via power purchase agreements or retail contracts
and renewable energy certificates (including small-scale technology certificates (STCs) and
Large-scale generation certificates (LGCs)) surrendered in connection with electricity consumed
during the reporting period. This is the Criteria for the accompanying Selected Sustainability
Information assured by PwC to a limited assurance level.
Renewable energy
exposure
Renewable energy exposures includes pure-play renewables companies and diversified power
generation customers where at least 90% of electricity generated is from renewable sources.
RepTrak
reputation score
RepTrak, The RepTrak Company. Data is collected throughout the quarter and reported at quarter
end. The reputation score is a calculation based on four statements measuring esteem, admiration
and respect, trust and good feeling towards the organisation; expressed as a score ranging from
0–100 to determine the reputational strength of the company.
Restricted share
units (RSU)
Rights to ordinary shares in CBA or a cash equivalent, granted under the LTAR and subject to
a pre-grant and pre-vest assessment (from the FY23 award onward), and service conditions.
324
Glossary of terms (continued)
Term
Definition
Retail MFI Share
Main Financial Institution (MFI) Share measures the proportion of Banking and Finance MFI
Customers that nominated each bank as their MFI. In the Roy Morgan Single Source Survey, MFI
is a customer-determined response where one institution is nominated as the primary financial
institution they deal with (when considering all financial products they hold). Peers include ANZ
Group, NAB Group and Westpac Group (including St George Group). CBA Group includes Bankwest.
Source: Roy Morgan Single Source survey conducted by Roy Morgan, Australian population 14+ (12
month averages to June 2024), excluding those unable to identify MFI. Roy Morgan has re-calibrated
the results from April 2020 to March 2021 to take into account methodology changes since COVID-19.
This has resulted in small differences to some of the previously published figures.
Return on equity
– cash basis
Based on net profit after tax (“cash basis”) divided by average shareholders’ equity.
Return on equity
– statutory basis
Based on net profit after tax (“statutory basis”) divided by average shareholders’ equity.
Senior leaders
Collective term referring to the individuals in the following executive groups: Executive Leadership
team, Executive General Managers and General Managers.
Service availability
(%) – Access
accounts using
online banking
Disclosures are reported at the brand level, therefore CBA excludes Bankwest. For more information
and detail on definitions, refer to the RBA Retail Payment Service Reliability Explanatory information.
Service availability (%) refers to the actual amount of time that the service is not experiencing a
significant outage, as a proportion of the amount of time during which the service was planned to be
available. Planned available time excludes planned outages (e.g. for system maintenance). Significant
outages are those unplanned unavailability of a service that meet minimum thresholds for the
duration of the outage and the proportion of customers affected. Service availability to access
accounts using online banking includes the access by web browser or mobile device app. This refers
to the ability to log in, transfer between own accounts at CommBank, initiate payments and/or view
accurate and up to date account information. Excluded is the ability to process payments, which is
covered in ‘make/receive account transfers – fast payments’ and ‘make/receive account transfers –
next business day’.
Short-term variable
remuneration (STVR)
Variable remuneration paid, subject to the achievement of predetermined performance hurdles over
one financial year. STVR is received as cash and deferred shares.
Signals analysed for
potential cyber threats
The average number of weekly observable events in the CBA and Bankwest network that are
analysed for potential cyber threats to 30 June. Excludes ASB businesses in New Zealand.
Significant IT
incidents
The number of significant IT incidents during the reporting period causing a severe or major
business impact for the Group. Incidents are categorised according to the Group’s IT Incident
Management Standard. Excludes ASB New Zealand. This is the Criteria for the accompanying
Selected Sustainability Information assured by PwC to a limited assurance level from FY24.
SpeakUP
Program cases
Number of cases reported to the Group’s SpeakUP Program during the reporting period. The reports
include both whistleblower and non-whistleblower disclosures. PT Bank Commonwealth (PTBC) is
included up to 30 April 2024 and Colonial First State is included up to 1 December 2021, after which
time our divestment from these businesses was complete. This is the Criteria for the accompanying
Selected Sustainability Information assured by PwC to a limited assurance level.
Substantiated
misconduct cases
This metric represents closed substantiated misconduct cases managed in Australia by the
Workplace Relations team, SpeakUP team and/or Group Investigations team during the reporting
period. The metric excludes incidents reported by local associates and joint ventures. There are
various internal policies within the Group that govern staff conduct obligations, such as the ‘Code of
Conduct’ which is the guiding framework at CBA. Colonial First State is included up to 1 December
2021, after which our divestment from the business was complete. This is the Criteria for the
accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
Support units
Support units are not business functions and are responsible for enabling the operations of the Bank.
Functions that are in support units include Human Resources, Technology, Financial Services, Operations,
Risk Management, Marketing & Corporate Affairs, Group Strategy and Legal and Group Secretariat.
325
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Term
Definition
Sustainability
funding (cumulative)
The cumulative funding provided up to 30 June tracked against the Group’s SFT. For the full definition,
including definitions of each asset category, refer to pages 99–103 of the 2024 Climate Report. The
new and incremental financing for the 12 months ended 30 June 2024 (FY24 contributions) has been
included in the scope of PwC’s limited assurance engagement on selected Sustainability Funding and
Sector-level Glidepath Subject Matter for the Group’s 2024 Climate Report.
Sustainability Funding
Target (SFT)
The Group’s target to provide $70 billion of cumulative sustainability funding by 2030. For the full
definition, including definitions of each asset category, refer to pages 99–103 of the 2024 Climate Report.
Total customers
The combined number of customers who have a relationship with the Group, as at 30 June.
A customer is defined as anyone who holds an open account. Includes retail and non-retail
customers and deceased estates. Customers who have a relationship with more than one entity
(CBA, Bankwest and/or ASB) may be counted more than once.
Total energy
consumption
(including electricity
and fuel)
Energy consumption is the consumption of natural gas, diesel stationary, transport fuel and
electricity for properties and electric vehicle fleet during the reporting period, under the Group’s
operational control in Australia; including two data centres under non-operational control. Energy
consumption is associated with fuel combusted for the business use of tool-of-trade vehicles, hire
cars and fuel expensed. This is the Criteria for the accompanying Selected Sustainability Information
assured by PwC to a reasonable assurance level from FY24.
Total fuel
consumption
Energy from the use of natural gas, transport fuels and diesel in data centres, retail and commercial
properties during the reporting period. Includes energy from the use of fuels such as petrol, diesel
and ethanol for transport, under CBA’s operational control in Australia. This is the Criteria for the
accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
Total renewable
energy consumption
– Australia (renewable
electricity purchased
and electricity generated
from on-site solar panels)
Comprised of energy consumed from renewable electricity purchased and electricity generated from
on-site solar panels in Australia during the reporting period. This is the Criteria for the accompanying
Selected Sustainability Information assured by PwC to a limited assurance level.
Total Waste
(commercial and
data centres)
operations)
Total waste included landfill waste, recycled waste and secure paper recycled waste generated
and collected from CBA and Bankwest commercial buildings during the reporting period, under
the Group’s operational control in Australia. This is the Criteria for the accompanying Selected
Sustainability Information assured by PwC to a limited assurance level.
Training completion
rate – Code of
Conduct
Percentage of employees who have been assigned or completed the ‘Code of Conduct’ learning
module recorded in the Group’s learning management system (PeopleLink) as at 30 June. It includes
employees who have a learning due date after 30 June. Excludes the training completion rates of
terminated employees and the employees of ASB businesses in New Zealand. Numbers prior to FY19
are for completion of ‘Our Commitments’ training. This is the Criteria for the accompanying Selected
Sustainability Information assured by PwC to a limited assurance level.
Training completion
rate – mandatory
learning
Percentage of employees who have been assigned or completed the Group mandatory learning modules
recorded in the Group’s learning management system (PeopleLink) as at 30 June. It includes employees who
have a learning due date after 30 June. Excludes the training completion rates of terminated employees and
the employees of ASB businesses in New Zealand. The Group’s mandatory learning modules are: Code
of Conduct; Conflicts of Interest; Valuing Privacy; Health, Safety and Wellbeing; Workplace Conduct (which
includes Sexual Harassment); Group Securities Insider Trading; Financial Crime (which includes Anti-Bribery
and Corruption, Anti-Money Laundering and Counter-Terrorism Financing); Fraud; Resolving Customer
Complaints; Information Security; and The Group Risk Management Approach. This is the Criteria for
the accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
Transition Plan
A plan that, at a minimum:
• contains a time-bound decarbonisation plan which is aligned to the goal of the Paris Agreement
to limit global warming to well below two degrees above pre-industrial levels; and
• includes the client’s Scope 1, 2 and 3 emissions.
CBA will engage a third party to assess applicable Clients’ Transition Plans against the above
two requirements.
326
Glossary of terms (continued)
Term
Definition
Transition risks
Risks arising from transitioning to a low carbon economy due to changes in domestic and international
policy and regulatory settings, technological innovation, social adaptation and market changes, which
can result in changes to costs, income and profits, investment preferences and asset viability.
Waste (commercial
operations) – landfill
Tonnes of waste to landfill generated per annum from CBA and Bankwest commercial buildings
under the Group’s operational control in Australia during the reporting period. Waste to landfill data
is based on combination of invoiced amounts and estimates based on an average tonnes per m2
of net lettable area. Invoiced amounts are estimated by the total number of bin lifts using density
conversion factors or actual weighed amounts where available.
Waste (commercial
operations) –
recycled
Tonnes of recycled waste generated per annum from CBA and Bankwest buildings under the Group’s
operational control in Australia during the reporting period. Recycled waste data is a combination of
invoiced amounts and estimates based on an average tonnes per m2 of net lettable area. Invoiced
amounts are estimated by the total number of bin lifts using density conversion factors or actual
weighed amounts where available.
Waste (commercial
operations) – secure
paper recycled
Tonnes of secured paper waste collected from CBA and Bankwest commercial buildings under the
Group’s operational control in Australia during the reporting period. Secured paper waste is shredded
and recycled in a secure process to protect privacy. Based on invoiced volumes which are estimated
using average weight per bin collected. In FY22, the process changed to also include onsite volumetric
measurement at selected sites.
Water
Water consumption includes tenanted usage from CBA and Bankwest commercial buildings and
data centres during the reporting period under Group’s operational control in Australia. Water usage
is based on a combination of invoiced amounts and estimates based on an average usage per m2
of net lettable area. This is the Criteria for the accompanying Selected Sustainability Information
assured by PwC to a limited assurance level.
Weighted average
number of shares
The calculation incorporates the bonus element of any rights issue, discount element of any DRP
and excludes “Treasury Shares” related to investment in the Bank’s shares held for future issuance at
vesting of related share based payment awards.
Whistleblower cases
Number of whistleblower cases on-boarded into the Group’s SpeakUP Program during the reporting
period. PT Bank Commonwealth (PTBC) is included up to 30 April 2024 and Colonial First State
is included up to 1 December 2021, after which time our divestment from these businesses was
complete. This is the Criteria for the accompanying Selected Sustainability Information assured by
PwC to a limited assurance level.
Women in
Executive Manager
and above roles
The percentage of roles at the level of Executive Manager and above filled by women, in relation
to the total headcount at these levels as at 30 June. PT Bank Commonwealth (PTBC) is included
up to 30 April 2024, after which time our divestment from this business was complete. Excludes
ASB businesses in New Zealand. This is the Criteria for the accompanying Selected Sustainability
Information assured by PwC to a limited assurance level.
Women in Manager
and above roles
The percentage of roles at the level of Manager and above (including Branch Managers) filled by
women, in relation to the total headcount at these levels as at 30 June. PT Bank Commonwealth
(PTBC) is included up to 30 April 2024, after which time our divestment from this business was
complete. Excludes ASB businesses in New Zealand. This is the Criteria for the accompanying
Selected Sustainability Information assured by PwC to a limited assurance level.
Women in Senior
Leadership (Group
Executives)
The percentage of executive roles that are filled by women as at 30 June. These roles are direct
reports of the Chief Executive Officer with authority and responsibility for planning, directing and
controlling the Group’s activities. For the list of current executives, refer to pages 94–97.
Women in workforce
The percentage of roles filled by women, in relation to the total headcount as at 30 June. PT Bank
Commonwealth (PTBC) is included up to 30 April 2024, after which time our divestment from
this business was complete. Excludes ASB businesses in New Zealand. This is the Criteria for the
accompanying Selected Sustainability Information assured by PwC to a limited assurance level.
327
COMMONWEALTH BANK
2024 ANNUAL REPORT
CREATING VALUE
DIRECTORS’ REPORT
FINANCIAL REPORT
ADDITIONAL INFORMATION
OVERVIEW
Climate-related statements
This Report contains certain climate-related statements which are subject to uncertainties, limitations, risks and assumption
associated with climate-related information and the ever-changing environment we operate in. The information in this Report
should be read in conjunction with the qualifications and guidance included in this Report as well as the 2024 Climate Report
available at commbank.com.au/2024climatereport.
Non-IFRS information
Readers should also be aware that certain financial data in this Report may be considered “non-International Financial
Reporting Standards financial measures” (non-IFRS measures) under Regulatory Guide 230 ‘disclosing non-IFRS financial
information’ published by ASIC, including, Net Profit After Tax – (“cash basis”), earnings per share (“cash basis”), dividend
payout ratio (“cash basis”) and dividend cover (“cash basis”). Although the Group believes that these “non-IFRS” measures
provide a useful means through which to examine the underlying performance of the business, such “non-IFRS measures”
do not have a standardised meaning prescribed by Australian Accounting Standards or IFRS and therefore may not be
comparable to similarly titled measures presented by other entities. They should be considered as supplements to the financial
statement measures that have been presented in accordance with the Australian Accounting Standards or IFRS and not as
a replacement or alternative for them. Readers are cautioned not to place undue reliance on any such measures.
Guidance on forward-looking statements
This Report contains certain forward-looking statements with respect to the financial condition, capital adequacy, operations
and business of the Group and certain plans and objectives of the management of the Group. Such forward-looking
statements speak only as at the date of this Report and undue reliance should not be placed upon such statements. Although
the Group currently believes the forward-looking statements have a reasonable basis, they are not certain and involve known
and unknown risks and assumptions, many of which are beyond the control of the Group, which may cause actual results,
conditions or circumstances to differ materially from those expressed or implied in such statements. Readers are cautioned not
to place undue reliance on forward-looking statements particularly in light of: current economic conditions, geopolitical events,
and global banking uncertainty including recent examples of instability in the banking system and regulatory, government and
central bank responses.
Forward-looking statements can generally be identified by the use of forward-looking words such as “may”, “will”, “would”,
“could”, “expect”, “intend”, “plan”, “aim”, “estimate”, “target”, “anticipate”, “believe”, “continue”, “objectives”, “outlook”,
“guidance” or other similar words, and include statements regarding the Group’s intent, belief or current expectations with
respect to the Group’s business and operations, market conditions, results of operations and financial condition, capital
adequacy and risk management. To the maximum extent permitted by law, responsibility for the accuracy or completeness
of any forward-looking statements, whether as a result of new information, future events or results or otherwise, is disclaimed.
The Group is under no obligation to update any of the forward-looking statements contained within this presentation,
subject to applicable disclosure requirements.
Forward-looking statements may also be made – verbally and in writing – by members of the Group’s management
in connection to this Report. Such statements are also subject to the same limitations, uncertainties and assumptions
which are set out in this Report.
328
Important notices
Registered office
Commonwealth Bank Place South
Level 1, 11 Harbour Street
Sydney NSW 2000
Telephone: +61 2 9262 8200
commbank.com.au
International locations
commbank.com.au/internationallocations
Share Registry
Link Market Services
Level 12, 680 George Street
Sydney NSW 2000
Mail: Link Market Services
Locked Bag A14 Sydney South NSW 1235
Telephone: +61 1800 022 440
Email: cba@linkmarketservices.com.au
linkmarketservices.com.au
Please note, Link Market Services (part of Link Group) was acquired by Mitsubishi UFJ Trust & Banking Corporation,
a consolidated subsidiary of Mitsubishi UFJ Financial Group, Inc. (MUFG) on 16 May 2024.
Link Group is now known as MUFG Pension & Market Services. Mailing and contact information is currently unchanged.
Over the coming months, Link Market Services will also progressively rebrand to its new name MUFG Corporate Markets,
a division of MUFG Pension & Market Services.
American Depositary Receipt (ADR) program
CBA ADRs are negotiable securities issued by BNY, with one ADR representing one CBA ordinary share. They are traded under the
symbol CMWAY and are classified as Level 1. They are not listed on any exchange and are only traded over-the-counter via brokers.
ADR Investors who hold ADRs via a broker should contact their US broker directly for queries relating to their holdings.
Registered ADR Holders – held via Computershare – should contact the registry directly:
Computershare Investor Services
P. O. Box 43078
Providence RI 02940-3078
USA
U.S. Toll Free Telephone: 1-888-BNY-ADRS (1-888-269-2377)
Telephone for International Callers: 1-201-680-6825
Website: https://www-us.computershare.com/investor
E-Mail: shrrelations@cpushareownerservices.com
CBA Investor Relations
Telephone: +61 2 9118 7113
Email: CBAInvestorRelations@cba.com.au
commbank.com.au/investors
All other enquiries
commbank.com.au/contactus
329
Contact us