Profile and Strategy
The Commonwealth Bank is one of Australia's leading providers of integrated financial services including retail, business and institutional banking, funds management, superannuation, insurance, investment and broking services.
The Bank is one of the largest stocks on the Australian Stock Exchange and is included in the Morgan Stanley Capital Global Index.
The key financial objective of the Bank is to have Total Shareholder Return in the top quartile of our Australian listed peers. Total Shareholder Return is calculated as the growth in the value of the investment in the Bank's shares, assuming all dividends are reinvested in shares at the point dividends are paid.
The strategic strengths of the Commonwealth Bank are;
The Commonwealth Bank brand is the most recognised brand in the Australian financial services industry. Other award-winning brands within the Bank include wealth management business Colonial First State Investments and retail broker Commonwealth Securities. In terms of scale, the Group has over 10 million customers and a strong domestic presence, with Australia's largest, most comprehensive financial services distribution network.
Banking
The Commonwealth Bank provides a full range of retail banking services including home loans, credit cards, personal loans, transaction accounts and demand and term deposits. The Bank has leading domestic market shares in home loans, personal loans, retail deposits and discount stockbroking and is Australia's largest issuer of credit cards. The Bank also offers a full range of commercial products including business loans, equipment and trade finance, and rural and agribusiness products.
The Institutional and Business Services division of the Bank serves corporations, government entities and other major institutions operating in Australasia. Corporate customers have access to financial markets services, securities underwriting, trading and distribution, corporate finance, equities, payments and transaction services, investment management and custody services.
Funds under Management
As a full financial services provider, the Bank also offers investment products and superannuation. The Commonwealth Bank is the country's largest manager of Australian funds, and largest retail funds manager in terms of total value of funds under management.
The asset management business manages investment portfolios for a diverse range of retail and wholesale clients. It provides a large range of active and indexed investment options. These options include Australian and international shares, listed property, fixed interest, credit, infrastructure, private equity and cash.
Superannuation & Insurance
The Bank provides term insurance, disability insurance, master trusts, annuities and investment products. The Bank is Australia's third largest life insurer and is Australia's largest manager in retail superannuation, allocated pensions and annuities by funds under management. Life insurance operations are also conducted in New Zealand, where the Group has the leading market share, and throughout Asia and the Pacific.
International
The Commonwealth Bank is represented internationally through the ASB Group in New Zealand including the Sovereign Insurance Group, life insurance businesses in Asia and Fiji, funds management operations in the UK, Singapore and Hong Kong, and representative offices in the USA, UK, Asia and the Pacific.
Networks and Alliances
The extensive reach of the Bank's distribution network is achieved through the combination of the Bank's branch network, EzyBanking centres and a nationwide agency arrangement with Australia Post.
The Bank also offers convenient 24 hour access to banking services via telephone banking and Australia's most extensive EFTPOS and ATM networks.
The Commonwealth Bank is a leader in online financial services in Australia with facilities that include NetBank, the Bank's Internet banking site; Commonwealth Securities, the country's most popular online broker; and HomePath, an online service that provides information on buying, selling or investing in property.
The Bank also has a wide agency and independent financial advisory distribution capability with trained and licensed investment advisers located throughout the branch network and aligned advisory services.
The Commonwealth Bank is characterised by its innovative alliances, which emphasise the application of technology to enhance customer service. The delivery of current and future information technology services to the Group is managed through the relationship with the Bank's technology partner, EDS Australia. The Bank has also formed a partnership with Telecom New Zealand (Australia) for all its telecommunication requirements.
The Bank has an alliance with Woolworths Ltd to deliver EzyBanking, a co-branded financial services product through Woolworths retail outlets nationally.
Community Support
The Commonwealth Bank is a long-standing supporter of community activities and organisations. This support is directed at a broad range of activities that bring long term benefits to Australians and reflect community activities and organisations. Areas of particular emphasis include medical, education, youth, science and technology, the arts and the environment.
Corporate History
The origins of the Commonwealth Bank Group lie in the former Commonwealth Bank of Australia, which was created in 1911 by an Act of Parliament.
This Act established the Bank as a statutory corporation to conduct commercial and savings banking business. Its functions were later expanded to encompass those of a central bank.
Subsequent legislative amendment in 1959 created a separate Reserve Bank of Australia to take over the central bank functions.
In December 1990, the Commonwealth Banks Restructuring Act 1990 was passed, which provided for:
In July 1991 an offer of just under 30 percent of the issued shares in Commonwealth Bank was made to members of the Australian public and staff of Commonwealth Bank. This was intended to strengthen Commonwealth Bank's capital base following its acquisition of SBV and to provide a sound foundation for further development of Commonwealth Bank's business. On 12 September 1991, 230 million shares were issued at an issue price of $5.40.
In October 1993, the Commonwealth Government sold a portion of its shareholding in Commonwealth Bank, thereby reducing its shareholding to 50.4 percent of the total number of issued voting shares. 178 million shares were listed on 1 November 1993, at an issue price of $9.35 for retail investors and $9.60 for institutional investors.
In June 1996, the Commonwealth Government sold its remaining 50.4 per cent shareholding in the Commonwealth Bank. The public offer component was fully subscribed.
In conjunction with this offer, Commonwealth Bank, pursuant to a buy-back agreement between Commonwealth Bank and the Commonwealth Government, agreed to buy back 100 million shares in Commonwealth Bank from the Commonwealth Government. The public offer and buy-back were completed on 22 July 1996.
The Government's public offer was for 399 million shares. Investors paid $6, with the remaining instalment of $4.45 being due on 14 November 1997. Investors were entitled to the three dividends payable in the intervening period.
Since privatisation was finalised in 1997, the Bank has extended its presence both nationally and overseas. In May 1989 the Bank purchased 75 per cent of New Zealand based ASB Bank Limited. On the 22nd of August 2000 the Group moved to gain full ownership of ASB Bank and purchased the remaining 25%.
On the 13th of June 2000, the Commonwealth Bank acquired 100% of the share Capital of Colonial Limited, a life insurance, banking and funds management group.
Today the Commonwealth Bank Group is a fully integrated financial services business. Providing a wide range of services, including retail, business, investment banking, broking services, insurance, finance company activities and funds management.
updated 15th November, 2002
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