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RNS Number:5769L
Commonwealth Bank of Australia
06 November 2006


Chairman's Address - 2006 Annual General Meeting



Opening Remark


The 2006 financial year was an important one for the Commonwealth Bank. We
delivered another very good financial result and made a record dividend payment
to you our shareholders. The Which new Bank program has been completed,
delivering significant financial benefits and productivity gains to the Bank. We
have also seen a smooth transition from outgoing CEO David Murray to Ralph
Norris, who has put in place a strategy which will build on the significant
Which new Bank benefits.


I hope you all received the Shareholder Review. This is a new document that we
prepared in response to your request for something that is better suited to the
needs of our retail shareholders. We put a lot of thought into the content to
ensure you still received the information that you find important. We have also
produced this report with the aim of being friendly to the environment as it
only contains 16 pages. Please make sure you notify the share registry if you
would like to receive this document instead of the Annual Report.


Results


The year's results have already been covered in detail in both the press and the
Annual Report. Therefore I will do a fairly brief summary this morning. The full
year result for the twelve months to June 2006 showed a 16 percent increase in
cash net profit after tax to $4,053 million. Cash return on equity increased
from 18.8 percent to 21.3 percent.


Some of the highlights of this result were:


   *Strong growth in banking income underpinned by profitable growth across
    all major product lines;
   *Wealth Management saw a substantial increase in Funds under
    Administration, to $152 billion, reflecting robust inflows and continued
    strength in investment markets;
   *Insurance achieved an increase in insurance premiums, operating margins
    and a favourable claims experience;
   *Strong growth in earnings from ASB in the competitive New Zealand market;
   *Following successful conclusion of Which new Bank, good progress made on
    strategic priorities set by Ralph Norris, which Ralph will discuss in more
    detail later;
   *Sound expense management and continued productivity improvements; and
   *Continued strength in credit quality across the whole portfolio.





Dividend


The Board again declared a record dividend on the back of this strong result.
The dividend paid for the full financial year was $2.24 fully franked, up from
$1.97 last year. The dividend payout ratio was 71 percent, or if you exclude the
Hong Kong sale, 74 percent. Over the last three years dividends have grown at an
annual compound rate of 13 percent.


Capital Management


In managing our capital, our primary objectives are to:


   *ensure sufficient capital is available to support the business growth,
   *meet regulatory capital requirements,
   *maintain an AA- credit rating,
   *minimise the cost of capital and
   *improve EPS and ROE so as to maximise shareholder value.


We have undertaken a number of capital initiatives in this regard.


The Board has also made amendments to the Bank's DRP rules, including the
ability for the Directors to nominate a discount up to 2.5% to the DRP price and
removal of the 10,000 share cap on the DRP. These changes will be effective in
this current financial year.


Corporate Governance and Board


Your Board takes governance responsibilities very seriously and we are
continuously planning for the future needs of the Bank. Specific criteria for
director appointments have been developed aimed at creating a Board capable of
challenging, stretching and motivating management so they can achieve sustained
outstanding performance. The Board has also in place a process for annually
reviewing its own performance, policies and practices and the performance of
each individual director.


I would like to thank my fellow Directors for their contribution and commitment
this year. I would especially like to acknowledge the contribution of Tony
Daniels and Barbara Ward who retire from the Board today.


Tony and Barbara have served as Directors during a period when the Bank has
undergone considerable change. Their contributions to the functions of the Board
have been significant and their expert insights into the specific issues dealt
with by the People & Remuneration Committee and the Risk Committee (of which
Tony has been a member) and the Audit Committee and Risk Committee (on which
Barbara has served) have been a great assistance in dealing with complex issues
covered by those Committees. I am sure you join me in wishing Tony and Barbara
all the best in the future.








We have recently announced the appointment of two new Directors. David Turner,
CEO of Brambles, and Jane Hemstritch, Managing Director for Asia Pacific,
Accenture. David joined effective 1 August 2006 and Jane joined effective 9
October 2006. Our two new Directors, along with Carolyn Kay, Warwick Kent and
Fergus Ryan, are all up for election at this meeting so I will outline the
experience they bring to the Board later in the meeting.


Conclusion


This has been a challenging year for the Bank. We have witnessed significant
change with the appointment of Ralph as CEO and with the successful completion
of Which new Bank. I would like to thank both David Murray and Ralph Norris for
their contributions as CEO during the financial year and congratulate them on
the way they managed a smooth and successful transition. The fact that we have
been able to maintain the momentum in the business and again deliver a very good
financial result is also a tribute to the commitment and hard work of all of our
people. It is our employees who deliver our success and they deserve to be
congratulated for their efforts.


Finally, I would like to thank our customers and shareholders for their
continuing support of the Commonwealth Bank.


I now hand over to Ralph.






                      This information is provided by RNS
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