Type Public (ASX:CBA)
Founded As a government bank (1911)
As a public company (1991)
Headquarters Sydney, Australia
Key people Dr John Schubert, Chairman
Ralph Norris, CEO & Managing
Director
Industry Finance and Insurance
Products Comprehensive and integrated
range of financial products and
services
Revenue $28.564 billion AUD (2006)
Subsidiaries ASB Bank, Colonial
First State Investments Limited,
Sovereign Limited,
CommSec
and CommInsure
Slogan Every day's a new day
Website www.commbank.com.au
The
Commonwealth Bank of Australia
(ASX: CBA), is the 2nd largest
financial institution in Australia
and 41st in the world (according
to Fortune Global 500) with businesses
in New Zealand, Asia and the United
Kingdom. Commonwealth Bank provides
a variety of financial services
including retail, business and
institutional banking, funds management,
superannuation, insurance, investment
and broking services. Commonly
referred to as the Commonwealth
Bank (or Commbank), it was founded
in 1911 by the Australian Government.
The bank was listed on the Australian
Stock Exchange in 1991 and was
fully privatised in 1996. The
Commonwealth Bank is now the fifth
largest Australian public listed
company on the Australian Stock
Exchange. Commonwealth Bank of
Australia brands include Colonial
First State Investments Limited,
ASB Bank (New Zealand), CommSec
and CommInsure.
History
Old Commonwealth Bank of Australia
savings passbook, issued 1977.
Foundation and Early History (1911-1941)
The Commonwealth Bank of Australia
was founded by an Australian Act
of Parliament in 1911 called Commonwealth
Bank Act. Bank Nationalisation
was the policy of the Andrew Fisher
Labor Government. In a rare move
for the time, the bank was to
have both savings and general
bank business. The bank was also
the first bank in Australia to
receive a Federal Government guarantee.
The bank's earliest and most strenuous
proponent was the flamboyant American-Australian
Labor politician, King O'Malley,
and its first Governor was Sir
Denison Miller.
The
first branch (the Melbourne branch)
of the bank opened on July 15,
1912. In an agreement with Australia
Post that exists to this day,
the bank also traded through post
office agencies. In 1912 it merged
with the state savings bank in
Tasmania and by 1913 it had branches
in all six states.
In
1916 the bank moved its head office
to Sydney. It also followed the
Australian army into New Guinea
where it opened a branch in Rabaul
and agencies elsewhere.
In
1920, the bank assumed the responsibility
for the issue of Australian bank
notes from the Department of Treasury,
the beginning of its acquisition
of central bank powers.
In
1920, the Commonwealth Bank merged
with the state savings bank in
Queensland.
In
1931 the government transferred
to the bank the savings bank business
of the Government Savings Bank
of New South Wales (est. 1871)
and the current account and fixed
deposit business of the Rural
Bank Department. The bank also
acquired the State Savings Bank
of Western Australia (est. 1863).
Central Bank (1920-1960)
The bank's role in central banking
expanded gradually after 1920.
In 1931, the bank board came into
conflict with the Labor government
of James Scullin. The bank's chairman
Robert Gibson refused to expand
credit in response to the Great
Depression (as had been proposed
by Treasurer Edward Theodore)
unless the government cut pensions,
which Scullin refused to do. Conflict
surrounding this issue led to
the fall of the government, and
to demands from Labor for reform
of the bank and more direct government
control over monetary policy.
In
1942, the CBC suspended its operations
in Papua New Guinea as the Japanese
Army captured many of the towns
in which it operated, and bombed
Port Moresby. The bank resumed
operations later, possibly in
1944.
The
Commonwealth Bank received almost
all central bank powers in emergency
legislation passed during World
War II and at the end of the war
it used this power to begin a
dramatic expansion of the economy.
This was also the aim of the Government
at the time, which colossally
expanded immigration programmes.
To respond to this, the bank established
a Migrant Information Service.
Predictably, the bank also expanded
during this period, in just five
years it opened hundreds of branches
throughout Australia and in 1951
the bank established a branch
in the Solomon Islands.
In
1958 and 1959, there was a controversy
concerning the dual function of
the bank as the central bank on
the one hand and a general bank
on the other. As a result of this,
the bank was split, giving the
reserve bank function to the Reserve
Bank of Australia and the general
bank function to the Commonwealth
Banking Corporation.
From
1958 to 1976 the Commonwealth
Bank operated savings bank agencies
in the New Hebrides.
Diversification (1960-1983)
A new Commonwealth Development
Bank was established in 1960 and
during the 1970s the bank diversified
its business into areas like insurance
and travel. It established a finance
company, the Commonwealth Bank
Finance Corporation in 1974. The
bank also became more heavily
involved in foreign currency trading
and international banking in general.
The
bank actively supported the introduction
of decimal currency in the years
leading up to 1966 and, like most
banks, it gradually converted
its paper records onto a new computer-based
system. The bank created the first
credit card in Australia in 1974
when it established Bankcard.
In later years the bank began
offering Mastercards (1984) and
Visa (1993) cards as well.
In
1974, as Papua New Guinea approached
independence, the bank formally
handed over its PNG operations
to the newly created and government-owned
Papua New Guinea Banking Corporation
(PNGBC). The bank retained a restricted
branch in Port Moresby that it
finally closed in 1982.
In
1981 the bank transferred its
operations in the Solomon Islands
to the National Bank of Solomon
Islands, which operated a joint
venture (51-49, Commonwealth and
Government of the Solomon Islands).
Deregulation (1983-1990)
Privatisation and the Colonial
merger (1990-2001)
In 1989 the bank acquired 75%
of ASB Bank in New Zealand.
In
1991 the bank acquired the State
Bank of Victoria (est. 1842).
Between 1991 and 1996 the Australian
government fully privatised the
bank.
In
1994 Commonwealth sold its shares
in the National Bank of Solomon
Islands to Bank of Hawaii.
On
10 March 2000, the Commonwealth
Bank and Colonial First State
Investments Limited announced
their intention to merge, with
seven Commonwealth Bank shares
being offered for twenty Colonial
Shares. The merger received final
approval from the Supreme Court
of Victoria on 31 May 2000 and
was completed on 13 June 2000.
This brought into the fold Colonial’s
stake in Colonial National Bank,
the former National Bank of Fiji.
The bank also acquired the remaining
25% of ASB Bank.
The bank today (2000+)
Commonwealth Bank was awarded
Bank of the Decade in November
1999 and also named Best Bank
at the Australian Banking &
Finance Awards for the years 1996,
2000 & 2002.
Banking
opportunities in Asia saw the
Bank acquire part ownership of
Indonesian Bank (PT Bank) and
establish strategic cooperation
agreements with Chinese Banks
Jinan City and Hangzhou City Commercial
Banks. Recently, a representative
office was established in Bangalore,
India.
On
27 Janurary 2006 the bank acquired
the remaining 49% stake in Colonial
National Bank (Fiji)
Environmental policy and concerns
In 2002, the Commonwealth Bank
came under fire by the Wilderness
Society for its 16% stake in the
controversial woodchipping company
Gunns Limited, which is involved
in the logging of old growth forests.
The Commonwealth Bank has retorted
that it does not itself hold any
direct investment in Gunns Limited,
but instead has invested in Gunns
through its funds management businesses,
on its behalf. The Wilderness
Society claims the Commonwealth
Bank is the second biggest shareholder
in Gunns, and at a Gunns shareholder
general meeting in August 2003,
the Commonwealth Bank has used
its shareholder voting rights
to vote against a resolution which
would have stopped the company
from destroying old growth forests.
Commonwealth
also owns an 8.2% share in the
Hazelwood power station, the most
polluting power station in Australia
and the industrialised world.
In
2006, the bank announced a three-year
partnership with the Great Barrier
Reef Research Foundation[5], becoming
the second project partner after
Rio Tinto Aluminium[6]. The Research
Foundation does research into
areas such as aquaculture of sponges,
identification of dangerous species
of Irukandji which threaten tourism,
and has previously been involved
with the a Crown-of-thorns starfish
eradication program
The
Bank has also established a toner-recycling
scheme.
Community support and sponsorships
Commonwealth Bank’s national
sport sponsorships include the
Commonwealth Bank Trophy and the
Netball Development Fund, the
Commonwealth Bank Cricket Academy
(Australian Cricket Academy),
and Australian Women’s Cricket.
Commonwealth Banks will sponsor
Australia's one day international
annual tri-series tournament from
06/07 to 08/09 cricket season.It
is also a long-term sponsor of
the Australian of the Year Awards.
Commonwealth
Bank is also helps raising funds
for medical research. Each year,
with the Bank's support, the Breast
Cancer Institute of Australia
has produces the Australian Women's
Health Diary, with all funds raised
benefiting the organization. Sales
of the diary have raised almost
$3 million for the Cancer Institute
of Australia with the Bank and
it’s staff contributing
more than $800,000.
Over
the past three years the Bank
contributed more than $158,000
to the Children’s Cancer
Institute Australia by supporting
their national fundraising and
awareness campaign. The Bank is
now working with Children’s
Cancer Institute Australia to
support their education and schools
fundraising program.
Other
organizations that the Bank supports
includes Prostate Cancer Foundation
of Australia, Australian Chamber
Orchestra (ACO), Tasmanian Symphony
Orchestra (TSO), Queensland Opera
Company, Country Arts South Australia,
Opera Australia, COTA [Council
on the Ageing] (NSW)(since 2001),
and Wesley Mission (since 1997).
Subsidiaries
Australia
CommInsure
CommSec
Colonial First State
New Zealand
ASB
Sovereign
Asia Pacific
Colonial
National Bank (Fiji)
PT Bank Commonwealth (Indonesia)
VTB
Bank and Commonwealth Bank of
Australia to Cooperate on Capital
Markets
09/10/2007
VTB Bank has signed an agreement
with Commonwealth Bank of Australia
on cooperation in capital markets.
The document aims to facilitate
expanded cooperation between the
financial institutions of the
two countries in developing joint
projects. The agreement provides
for strategic cooperation on Russian
and Australian markets, as well
as on global financial markets.
It defines the terms of cooperation
in the economic and investment
areas and covers information exchanges
between the two banks in joint
program implementation.
Commonwealth
Bank of Australia Announces Earnings
Results for Fiscal 2007 ; Declares
Dividend
08/15/2007
Commonwealth Bank of Australia
announced earnings results for
fiscal 2007. The bank made a net
profit of $4.470 billion for 2006/07,
up 13.8% on the previous year.
CBA's fiscal 2007 result was underpinned
by strong performances in all
divisions with banking, funds
management and insurance delivering
double digit growth in underlying
net profit. The company declared
a final dividend of $1.49, taking
the total for the year to $2.56,
up 14 % on fiscal 2006.
Commonwealth
Bank of Australia Mulls More Acquisitions
08/14/2007
Commonwealth Bank of Australia,
which recently expanded its reach
in Indonesia, is seeking further
growth in the country. The company
recently acquired Bank ANK and
a stake in PT Astra CMG. “We
remain interested in further increasing
our presence in Indonesia and
will continue to seek to do this
through a combination of acquisitions
and organic growth,” said
Ralph Norris, Managing Director
and CEO of Commonwealth Bank of
Australia.
KEY
EXECUTIVES FOR CBA
Name Board Relationships Title
Age
Ralph James Norris 11 Relationships
Chief Executive Officer, Managing
Director, Director and Member
of Risk Committee 57
Warwick Martin Negus 2 Relationships
Chief Executive Officer of Colonial
First State Global Asset Management
John K. O'Sullivan No Relationships
Chief Solicitor and General Counsel
52
David Paul Craig 8 Relationships
Group Executive of Finance and
Risk Management 51
Bryan Fitzgerald No Relationships
General Manager of Communication
and General Manager of Community
and Reputation --
Ian Narev No Relationships Group
Head of Strategy
Ross Maxwell McEwan 3 Relationships
Head of the Retail Banking Division
Peter Anthony Barnes 20 Relationships
Head of Institutional Banking
Property
Ian Saines No Relationships Head
of Global Markets Division
Lyn Cobley No Relationships Executive
General Manager of Balance Sheet
Management and Treasurer
CBA
BOARD OF DIRECTORS
Name Board Relationships Primary
Company Age
John M. Schubert 28 Relationships
Commonwealth Bank of Australia
63
Ralph James Norris 11 Relationships
Commonwealth Bank of Australia
57
Francis J. Swan 18 Relationships
Foster's Group Ltd. 65
Fergus D. Ryan 18 Relationships
Commonwealth Bank of Australia
63
Reg J. Clairs AO 17 Relationships
David Jones Ltd. 68
CBA EXECUTIVE COMMITTEE
Committee Name Chairperson Board
Relationships Members
Audit Committee Fergus D. Ryan
18 Relationships 3 Executives
Compensation Committee Reg J.
Clairs AO 17 Relationships 3 Executives
Committee on Directors John M.
Schubert 28 Relationships 3 Executives
Financial
Statements for Commonwealth Bank
of Australia
Year over year, Commonwealth Bank
of Australia has been able to
grow revenues from A$8.8B to A$9.3B.
Most impressively, the company
has been able to reduce the percentage
of sales devoted to selling, general
and administrative costs from
35.29% to 32.59%. This was a driver
that led to a bottom line growth
from A$3.9B to A$4.5B.
View Income Statement In U.S.
DollarAnnualQuarterly Currency
in
Millions of Australian Dollars
As of: Jun 30
2004
Restated Jun 30
2005
Restated Jun 30
2006
Restated Jun 30
2007 4-Year
Trend
Revenues 7,840.0 8,366.0 8,806.0
9,307.0
Other Revenues -276.0 -322.0 -398.0
-434.0
TOTAL REVENUES 12,974.0 14,070.0
14,922.0 15,909.0
GROSS PROFIT 12,974.0 14,070.0
14,922.0 15,909.0
Selling General & Admin Expenses,
Total 950.0 3,263.0 3,108.0 3,033.0
OTHER OPERATING EXPENSES, TOTAL
950.0 3,263.0 3,108.0 3,033.0
OPERATING INCOME 12,024.0 10,807.0
11,814.0 12,876.0
Other Non-Operating Income (Expenses)
-7,633.0 -5,795.0 -5,955.0 -6,338.0
EBT, EXCLUDING UNUSUAL ITEMS 4,391.0
5,012.0 5,859.0 6,538.0
Merger & Restructuring Charges
-749.0
Other Unusual Items, Total 201.0
EBT, INCLUDING UNUSUAL ITEMS 3,843.0
5,012.0 5,859.0 6,538.0
Income Tax Expense 1,262.0 1,602.0
1,900.0 2,041.0
Minority Interest in Earnings
-9.0 -10.0 -31.0 -27.0
Earnings from Continuing Operations
2,572.0 3,400.0 3,928.0 4,470.0
NET INCOME 2,572.0 3,400.0 3,928.0
4,470.0
NET INCOME TO COMMON INCLUDING
EXTRA ITEMS 2,463.0 3,269.0 3,928.0
4,415.0
